Wednesday, 8 February 2012

Can you own water? [update 2]


That’s become the question of this political term, hasn’t it, the answering of which is going to hold up the government’s flagship sell-a-little-bit programme for its power companies: Can you own water?

Simple answer: Yes, of course you can.

The ownership of water is not only possible, it’s often highly desirable.

It de-politicises arguments about resources.

It solves the Tragedy of the Commons in water.

It solves the increasing problem of dirty dairying.

It solves the problems involved in the South Island river systems, where there are many competing uses for the limited water available.

Recognising ownership in a water resource is not only moral, it’s practical. The answer to the problems cited and many more besides is to recognise there is no greater protection for both environment and water users than the protection of property rights and the legacy of common law -- if only these were allowed to function as they should, by placing the power of law behind those who truly value the specific resource under threat.

Ownership of water not only could happen, it should happen.

If the way to open those floodgates is by recognising specific claims to ownership, however flawed initially, then so be it.

Better it begins some way than never to begin at all.

* * * * *

* I make no comment at all here on the veracity of claims now hitting the headlines, nor on the anachronistic argument asserting property rights were recognised in New Zealand before 1840.
But as Ronald Coase points out, once a property right is finally recognised in law then (as long as transaction costs are kept low) it will end up in the hands of those who value it the most. And that would be a good result, right?

UPDATE 1: The collectivisation of water has failed New Zealanders.

So in addition to the excellent links I’ve provided above, I’d like to highly recommend a Canadian organisation called Environment Probe who have written many excellent things on The Role of Property Rights in Protecting Water Quality, including these many wonderful publications.

UPDATE 2: Yes, I do own water says Liberty Scott.

If I have land, and collect water on that property, it is mine.
Just because the state treats the sea, rivers and lakes as owned by it and local authorities, doesn't mean that water can't be owned.
It is ludicrous to claim otherwise.
Reticulated water costs money. It requires people to work, people to construct, lay, maintain and replace pipelines, dams, pumps and the electricity required to operate them. That isn't free.


  1. Disagree.

    As JK said you can 'own' water allocation/usage rights. But how in the hell do you 'own' the water molecules themselves?

    Good luck tracing where they all go.

  2. @V: A property right in water can be, but is not necessarily, a right in the water molecules themselves.

    It may be a right to the water molecules themselves--if, for instance, you have them successfully contained.

    But, more generally, it is a right in water, e.g., a riparian right to a water flow; a harvesting right (a 'profit a prendre') to fish or shellfish; a useage right to swim or surf or paddle on; a right to take etc.

    None of these rights are at all problematic under common law--and were well-recognised property rights when the Treaty was signed.

    Your mate J.K. however is using confusion to rule out both senses of rights--both rights in and rights to.

    But then, he has never been interested in property rights.

  3. @V: Bear in mind here that whagt is being talked about is not a general right to all water, which is what your question implies, but specific rights in (or to) particular bodies or flows of water.

  4. @PC

    But in NZ's case won't these rights just incentivise those upstream to basically extort (rent seek) those who so happen to have their productive enterprise downstream?

    I'm not sure what the answer would be, other than some sort of first-come first-serve system?

  5. Upstream land would immediately have an extra value because of precisely that! Personally, I think whoever owns the land that the rain falls on owns the water, and you haven't seen water arguments until you live in Aussie!

    Its a shame it wasn't left in private hands all along, as State ownership has created giant distortions in usage and powerful lobbyists are there to make sure it stays this way.

    You shouldn't grow high water usage crops in a desert country, but if the Govt will give you the water rights...

  6. You can also own air to a certain extent through property rights if it is rare enough. If you look at La Paz that ranges over an altitude of 3000-4000m the more affluent areas are at at the lower altitude (better climate & more oxygen)

  7. @KP

    I don't see how the rent seeking benefits anyone?

  8. This interview with Robert Glennon on Radio New Zealand might be of interest:

    Robert Glennon is the author of Unquenchable: America's Water Crisis and What To Do About It.


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