Source: http://twitter.com/planetmoney/status/1288600809824018437
Come for the comedy; stay for the tragedy…of the commons. The latest episode of #PMSummerSchool is up, where we talk about how to share a scarce resource that everyone needs. https://t.co/78FZRothpk pic.twitter.com/Pvd2M8Muz6
— NPR's Planet Money (@planetmoney) July 29, 2020
We travel to Porterville, California, where a drought has dried up residents' wells. There's water under their homes; they just can't get to it.
Who can? Farmers growing almonds and pistachios, who can afford to drill deeper and deeper wells. And with such a lucrative crop, they have no incentive to share the water. But California is looking at ways to change that.
Our resident economists, Betsey Stevenson and Justin Wolfers from the University of Michigan, say that there are only a few ways you can manage a scarce resource. Government can step in and make rules about who gets what. Or perhaps more efficiently, the government could tax the resource and make it more expensive to take an extra sip of water from a group well. There is also the concept of cap and trade, which limits what you can use. But you can sell your share to someone else.