Water is the most important resource on Earth; without it there would be no life—at least not as we know it. Water sustains our bodies, allows crops to grow, and plays a critical role in virtually all ecological processes. A diamond, on the other hand, has limited practical utility as a resource except in some industrial applications and as an accoutrement for many proposals. Comparing the usefulness of these two resources, we are left with a question: Why are diamonds so expensive and water is free?
In his book The Wealth of Nations, Adam Smith (the pioneer of modern economics) mulled over this problem which is often referred to as the Diamond-Water Paradox. While Smith was a proponent of the idea that the price of something is tied to the amount of work it takes to bring it into the marketplace (the labor theory of value), he explored the idea that the value is tied to the difficulty in obtaining the resource. However, that did not explain the price difference in terms of the resource’s usefulness. Regardless of how well this problem has been addressed academically, the price difference between these resources remains and many people are content with the arrangement; after all, we rarely need to buy a diamond, but we use water every day.
This difference in market value presents some associated challenges. In a world, or at least in the U.S., where perceived value is often tied to market value, are people treating water resources like they are precious commodities? The Mitchell L. Mathis Program for Environmental Water Economics hopes to speak to some of these incongruities and help people begin to think of water more holistically. While on one hand the program will expand the understanding of water valuation in the common currency (dollars), it also seeks to help people see water valuation differently—in terms of its different values for different users. For example, the irrigator may value water for the crops it produces, and the birdwatcher may value water for the habitat it provides.
To dive deeper and understand the value of water from the standpoint of all the users (including the environment), the Mathis Program will enable people to see the value of water from multiple points of view. Water irrigates our crops and flows through our municipal taps, but it also affords us opportunities to recreate and provides critical functions to our bays and estuaries. This is obviously an incomplete list, but the idea here is to get people thinking about the myriad uses for water and the way we think about its value.
The Mathis Program is delving into these issues to help people understand and think through how we use and conserve water in a landscape characterized by increasing scarcity. This program takes a holistic approach to the issue and is led and staffed by a highly interdisciplinary team with experience across the spectrum of water issues. The Harte Research Institute at Texas A&M-Corpus Christi, the Meadows Center at Texas State University, and the Cynthia and George Mitchell Foundation are all acting in concert to help the people of Texas, and beyond, by providing tools and curriculum that will help us value water in ways that will lead to its smart and efficient use.
To achieve these goals the Mathis Program will take a multi-faceted approach. Engaging stakeholders and conducting outreach activities is a key part of the program. Executing research and developing new ideas and tools to enhance water valuations is another program priority. As the Program matures and grows, it will remain adaptable to meet the needs of the people. Our water woes are complex issues, and we will probably not find a single approach that will be a panacea to these problems. From conservation to market-based strategies, the Mathis Program will seek to educate the interested and provide tools to enhance the efficient allocation of this precious resource.