The entire problem with California...
...is that there is no realistic price to the end consumer on water. It is highly subsidized to all users, especially agriculture. When I started studying this problem 25 years ago, we had farmers growing rice in a desert environment! And since the water was almost free to the farmers, why shouldn't they?
That we see little private activity in the market for water at a state level or globally is of little mystery: There is no way that any private entity can compete with a state subsidy that practically gives away the end product with little regard to actual cost of collecting and transporting it. (Could you even imagine how we'd consume oil if it was provided in this way)
Whenever something is susbsidized, at best there will be overuse of it, and at worst, there will be contempt in the use of it. It we want farmers, corporations, and individual consumers to respect water, the only way to do so is to make them pay a higher price for it. I seriously question any supposed "capitalist" who can't seem to understand that.
