Drought situation has become severe in California that is why people in the cities are asked to cut their usage of water 10 to 15 %. To handle the situation, this new regulation has been made by the government by which use of water can be reduced by creating limitation on the flow of water in toilets, urinals and faucets, although the idea had been criticized by the economists as according to them there are many other ways through which this drought can be reduced. Economists think that more water can be freed and used by everyone if financial tools are put to work with the management of water in this scenario of drought. Water market has been working for many years and it is not a new task for it. Water market can judge that at which place the water is more scare and where it will be enough for the use.
Director of Colorado River Program for the Environmental, Jennifer Pitt considered this drought as a train which has been running towards them with a speed of three miles per hour and this train needs to be get off the track otherwise it would be their own mishandling if they do not get success in getting this off the track. California on one hand has been facing the drought situation while on the other hand, Colorado has also been caught in a problem as the Colorado River Basin and many other watersheds are in in difficulty too. If dry areas on the earth are taken into consideration, then it should be known that they are getting drier with the change in the climate which means that the period of this drought will extend.
A hurdle in the way of preserving water is the law according to which most water is bound to property rights and these doctrines does not allow to move water around and trade it with other users. Due to these inflexibilities in the policies and rules of water in western region have made the condition problematic and risky. These laws should be reformed so that the transfer of water for the short term can be encouraged. Basic Market Institutions can be established so that the trading of water can be assisted, system should be made consistent and unfailing and for that the policies should be made to minimize the risk. There must also be work done to stop making link of water rights with the diversion and it should be tried to search that how water rights can be linked with consumption.
Elimination of such laws would provide help according to which old system has been followed and lot of things are coming in the way to change that system. By untying these hard rules from the water markets, these markets can give better results.