UNSUSTAINABLE. The western drought means Lake Mead, a reservoir on the Colorado River, is losing water. Las Vegas is attempting to finance new intake cribs before the existing ones are left high and dry. What was I saying about the effects of subsidized water and power?

I've often viewed the State Line as a potential flash point in a future civil war, with Lake Michigan visible from places that can't use its water. Perhaps the West will be another such flash point.

More encouragingly, the article notes that markets allocate resources.

“People view water as a human right and expect it to be virtually free,” says Michael LoCascio at Boston-based Lux Research Inc., which analyzes water issues. “Governments respond to that, and you end up with inefficiency.”

Without price-setting markets, water that cost 33 cents a cubic meter for the first 15 cubic meters delivered to homes in Memphis, Tennessee, in June 2007 was $3.01 in Atlanta and 57 cents in Las Vegas.

That’s cheap compared with Copenhagen, where the same amount that month was $7.71 per cubic meter, [Peter] Gleick says.

The higher Atlanta price reflects the Southeastern drought.