Florida Water Use and Conservation

• Anthony B. Chen, Candidate for B.A. Economics

Note: This article is part of a series that showcases the work of UF undergraduate students.

Florida’s estimated freshwater consumption has been on an upward trend for both public supply (utility) use and agricultural use until the year 2000, but has shown decline since then. Reasons include regulatory requirements, rate increases, more efficient plumbing fixtures, loss of agricultural acreages, and the increasing use of reclaimed water and storm water for irrigation.

Table 1 shows that the total water use increased between 1975 and 2000 and that this increase is largely a result of increase in public usage and agricultural usage. Overall freshwater withdrawals increased by 21% between 1975 and 2000. In comparison, agricultural irrigation increased by 34% while public supply increased by 117%. However, Florida’s population increased from 8.5 million in 1975 to 16.1 million in 2000, which represents an 88% increase [2].  That means that per capita increase in public supply of water between 1975 and 2000 was 15%.

Following 2000, total water usage declined for both public supply and agriculture with total freshwater withdrawal decreasing by 22 %. Public supply withdrawals decreased by 8%. Population increased from 16.05 million in 2000 to 18.84 million in 2010, a 17% increase. This equates to a 21% decrease in the public supply water use per capita.

This decrease in public water consumption is due in part to conservation measures mentioned previously, but also to reductions in use due to the great recession. In the same period, agricultural irrigation decreased by 35%. While agricultural water use accounted for a larger portion (when taking into account the increase in population) of the increase in water withdrawal between 1975 and 2000, it was also a larger portion of the decrease in water withdrawal between 2000 and 2010.

These numbers are difficult to compare, as there have been methodology and classification changes in how water consumption has been calculated in Florida between 1975 and 2010. However, even without specific numbers it can be seen that water usage should be a growing concern to Floridians. Saltwater intrusion has been an ongoing concern in South Florida in recent years. Saltwater intrusion is the movement of saline water into freshwater aquifers, and occurs primarily when the water levels of the aquifers decrease.

Figure 1 shows the gallons per capita per day demand for water for different property value percentiles of 16 different utilities across the state [3]. Each profile directly relates to homes of a certain property value: Profile 1 is the lowest quartile of house prices, Profile 2 is the mean of house prices, Profile 3 is the highest quartile of house prices, and Profile 4 is the highest tenth of house prices. Assuming an individual’s property value correlates to their income, Profile 2 would represent the demand preferences of a typical water consumer. For example, in Alachua County, the price of water is $2.35 per 1,000 gallons for the first 6,000 gallons [4]. A typical individual with these demand preferences would consume between one hundred and one hundred fifty gallons per day at those rates. On average in the State of Florida, the per capita daily withdrawal of public supply water was 134 gallons total and 85 gallons for residential withdrawals [1].

For water utility customers, the cost of water is determined by the fixed rate set by their local utility company. This rate is influenced by elected entities for public utilities and the Public Service Commission for private utilities. On the other hand, the cost of water for agricultural users and people with private wells depends on the cost of purchasing and maintaining equipment necessary to pump the water out of the ground. While public utility water use in the U.S. is typically subject to strict regulation, agricultural water usage is regulated more loosely.

The two prices are not perfectly comparable; the price utilities charge includes costs of extraction, treatment, administration, and may include a monopolistic rent. If utilities indeed use monopoly pricing, deadweight loss exists in the form of the monopolistic rent. Deadweight loss is the loss of total welfare to society; as a result, while some individuals may be better off under the price difference, it results in an overall negative impact on society. Lowering the price of utilities to the price of perfect competition would remove this deadweight loss. However, the profit made by utilities is historically used by the government to fund other projects that are beneficial to society. In addition, considering Florida’s current water use and conservation efforts, lowering the price of water from utilities would have a detrimental effect of increasing demand instead.

The unregulated price of agricultural water use has a negative effect on society. Agricultural water is essentially a public good; users can consume as much as they choose, given they can pay for the extraction and maintenance costs. This inevitably results in the “Tragedy of the Commons” i.e. an overconsumption of the good. The correction to this state would be to have the government involved in the pricing of water. However, raising the price of water through government regulation creates a deadweight loss for agricultural users. As a result, there is a tradeoff for government regulation of water, which should be considered when working to provide a net benefit to society.

Total irrigation withdrawals for Florida agriculture in 1990 were 1.37 trillion gallons of water [5]. Of this amount, 52% of the water was supplied from groundwater wells, for which the costs are associated with the equipment and energy used to pump and distribute water, which vary largely by location.

The remaining water used for irrigation was taken from surface water sources. On-site surface water may be lower in cost than groundwater, but off-site surface water may be more expensive as a result of transportation cost.

Nationally, the average price of groundwater is $2-$15 per acre-foot for on-site groundwater and $14 per acre-foot for off-site surface water [6]. This is equivalent to 0.6 to 5 cents per 1000 gallons for groundwater and 4.3 cents per 1000 gallons for off-site surface water.

This value is not directly comparable to the price that individuals of the general public pay for water; that is, the price for a member of the general public to utilize groundwater would be higher than that. There is infrastructure, water treatment and processing, and other associated costs that must be factored into the cost of water for use by the general public. However, it remains true that the cost for the use of water by the general public is higher than the cost for the use of water for agriculture. This may either be necessary to prevent utility companies from operating at a loss or the result of monopoly pricing.

In terms of irrigation methods, Florida has historically been more efficient than the United States [7]. This is a result of the prevalent crop types raised in Florida, as well as the results of conservation and education efforts. However, when looking at the areas where water is used less efficiently, there are two principal reasons: cost and information. Cost goes both ways. There is a higher cost associated with more efficient irrigation fixtures, both for installation and maintenance. In addition, the cost of using more water is often overlooked since it is not a visible cost to the agricultural user. The information aspect relates to efficient water use depending on climate and soil conditions. Growers may not have sufficient information to irrigate the optimal amount in the right places, and may thus overuse water

Part of the solution would be to implement an excise tax on agricultural users for the water they use over a certain point. Attempts to affect agricultural water pricing has been researched in Georgia [5]. There, research indicated an increase in the price of 1000 cubic meters of water by $41 would decrease water consumption by 610 cubic meters per acre. That is equivalent to increasing the price of water per 1000 gallons by $0.0155, which ranges from a 0.3 to 2.6 percent increase in the price of water at national averages. Georgia auctions irrigation permits in drought years. This action results in an effective increase in the price of water by $44 per 1000 cubic meters. Not only does this encourage agriculture to decrease water usage, it also encourages them to use better water management practices [5].

Since agriculture uses the most water in the state, levying a tax on water use would help alleviate the decreasing supply of water in Florida. However, taxing water use may hurt the agricultural industry more than the social benefit from preserving the public good. The citrus industry, in particular, has suffered losses due to citrus greening, and a tax would be particularly burdensome. Additionally, higher water prices may lead to higher prices for agricultural products, which would have a negative impact on many households.

Thus, it would be beneficial to couple the tax with an initial grant and continuing subsidy regarding agricultural fixtures. The grant would enable to the government to set up meters to measure water usage, and allow agricultural users to purchase the more water efficient irrigation equipment. The subsidy would reduce the cost of maintenance and repair of those fixtures. A large part of the reason many agricultural users use inefficient irrigation methods is because those are less expensive, so reducing those expenses incentivizes them to use more efficient irrigation. It could also potentially allow the government to monitor water use and ensure that water use is decreasing. Of course, it is necessary to perform a cost-benefit analysis to determine the effectiveness of such a proposal, as well as additional considerations such as how large a well or irrigation fixture should be to be metered. The procurement and transportation of water is a cost that agricultural users bear, but conservation efforts have a cost as well. Naturally, they would like to use less water, but only if the cost of that water exceeded the cost of conservation.

Additionally, it would be beneficial continue to and further encourage agricultural users to conserve water and utilize better water management practices. The government could bolster their current efforts to educate agricultural users on conservation farming methods. For example, the government could further research into irrigation schedules and then educate agricultural users about effective irrigation levels depending on local conditions. The average agricultural user does not have the resources to research efficient water use. However, the government and public institutions already participate in this type of research. Providing the information that they have acquired to the agricultural users more aggressively could result in a greater efficiency of water usage.

For the efficient use and conservation of water in Florida, the government could consider expanding programs for better water management by agricultural users of water. Research could determine the efficient water use level for plots of land depending on factors such as crop demand, soil quality and composition, location, temperature, and humidity. In order to enhance the current programs, policymakers need greater insight into how to promote efficient water use from agricultural users and the costs associated with that level of efficiency. Much research has already been done on this subject, but given the vast amount of water used by agriculture and the scarcity of potable water in the state, more research is needed to ensure a sufficient supply of water for agriculture while minimizing the adverse impacts of that use.

Note: This article is part of a series that showcases the work of UF undergraduate students.

REFERENCES:

[1] From Historical Water-Use in Florida. United States Geological Survey, Sep. 15 2016, fl.water.usgs.gov/infodata/wateruse/historical.html. 

[2] United States Census Bureau.  www.census.gov.

[3] Whitcomb, John. From Florida Water Rates Evaluation of Single-Family Homes. Southwest Florida Water Management District, Jul. 13 2005, www.swfwmd.state.fl.us/documents/reports/water_rate_report.pdf.

[4] Residential Rates Electric, Gas, Water, & Wastewater.  GRU, Oct. 1 2014,www.gru.com/Portals/0/Legacy/Pdf/RatesCharges.pdf.

[5] Wichelns, Dennis.  Agricultural Water Pricing: United States.  Organization for Economic Co-operation and Development, 2010, www.oecd.org/unitedstates/45016437.pdf.

[6] Gollehon, Noel. Water Use and Pricing in Agriculture. United States Department of Agriculture, https://www.ers.usda.gov/webdocs/publications/41964/30286_wateruse.pdf?v=41143

[7] Morgan, Kelly. Dukes, Michael. Zotarelli, Lincoln. Use of Irrigation Technologies for Production of Horticultural Crops in Florida. University of Florida, https://www.sfwmd.gov/sites/default/files/documents/2008_bmp_workshop_irrigation_scheduling_and_tools.pdf