The insanity of urban water conservation
From a Reuters article on Australia's water shortage:
Glenda Way turns on the shower tap and reaches for a bucket, catching drops until the water is warm enough for her wash.
Each day for the past year, Way, 58, has collected a bucket of fresh water which she later pours on the parched rose garden of her home north of Australia's largest city of Sydney.
"Everyone is doing it," Way told Reuters. "When you get a whole bucket of water from one shower, it makes you realize how much has been going down the drain."
Way is one of a growing army of Australian water misers, who are finding new ways to live with tough restrictions on water use as much of the nation enters its sixth year of drought.
Faced with record low dam levels, Australia's major cities have introduced limits on household water use, and city dwellers are sharing the pain of a drought that has devastated rural production and cut 0.5 percent from economic growth.
Householders are responsible for only 9 percent of Australia's water consumption but all major cities, except the rain-drenched tropical northern city of Darwin, have imposed restrictions on water use over the past five year.
Read the whole article. Again we see city dwellers investing enormous resources (consumer inconvenience plus the costs to enforce ordinances against car washing etc.) and capital (replanting gardens, installing low-flow fixtures). Do the math: if Australia reduces household consumption by 20% it will impact total Australian water usage by only 2% - the same impact as reducing use in agriculture and industry by….2%*. Which do you think is the logical place to invest resources in reducing consumption - targeting millions of households or a few large farming operations? By the way, Australia is not simply farming for domestic consumption; it exports the majority of the wheat grown domestically and is one of the largest food exporters in the world. Cutting back the land under cultivation would not only save a lot of time and money for Australia's urban dwellers but might have a huge benefit to low skill agricultural workers in South Asia by increasing agricultural employment and productivity there.
Australia is not alone by any stretch; Philadelphia recently made the news with a local skyscraper trying to install waterless urinals to save 1.6 million gallons per year. This sounds impressive until you again do the math and realize "we" encourage builders to spend $thousands on water saving appliances to save $100 per year in water ($~20 per acre foot for agricultural water * 5 acre feet)**.
*If elasticity is .48 you could accomplish this by raising the price of agricultural water by only 4%. This doesn't seem unreasonable considering the degree to which agricultural water prices are already subsidized.
** To be fair it can still make sense to install waterless urinals in a new build (not a retrofit) if you value water at the building's marginal cost for water (the city rate). All I'm saying is that it's insane for state policy to focus on reduction by urban users who already pay a high price rather than by farmers who use 10x as much at a very low price.
Update: Also see this new report on the Colorado river:
Steadily rising population and increasing urban water demands in the Colorado River region will inevitably result in increasingly costly, controversial, and unavoidable trade-off choices to be made by water managers, politicians, and their constituents.
A significant trend in the quest to meet rising water demand has been the sale, lease, and transfer of agricultural water rights to municipalities, particularly in southern California and Colorado (in Arizona, tribal settlements, with transfers to municipalities, have also been important). With about 80 percent of western U.S. water supplies devoted to irrigated crop production, agricultural water appears to constitute the most important, and perhaps final, large source of available water for urban use in the arid U.S. West. Modest shifts of agricultural water to municipal and industrial uses can do much to help meet increasing urban water demands. At the same time, however, agricultural-urban transfers often entail “third party” effects that include costs for rural communities, ecosystems, and others indirectly dependent on water supplies affected by the transfers.

Boats stranded by the tide near Ha Long, Vietnam
Luke Moulton Feb 20
Kurt, although the math stacks up, in reality Australian agriculture is suffering greatly due to drought and an increase in water costs would only hurt farmers more. Targeting other industries would be more beneficial. In regards to domestic water savings - every little bit helps!
Kumar Jun 20
Saving urban water also saves energy needed for water treatment and transport (pumping), and for collection and treatment of wastewater, as well as the chemicals needed for treatment, and so reduces all the associated environmental impacts - impacts that agricultural water does not have. Saving relatively tiny volumes of urban water is not that silly when you take the full costs into account.