Water scarcity, urban population growth, and deteriorating infrastructure impact water security around the globe. As California wrestles with the most significant drought in its recorded history, struggling to secure reliable water supplies for the future, it faces all of these crises. The story...

The water prices that implement the optimal water policy are derived. These prices contain the supply cost components and two shadow price terms: one reflecting the in situ value of natural water and the other representing the scarcity of recycled water. The former accounts for the scarcity,...