The whole thing with california reminds me of the story about that one civilization in the pacific - "what were they thinking when they cut down the last tree ?"
Water exists until it doesn't.
Water exists until it doesn't.
Of course, the same applies to the last of many things - what were they thinking of when they killed off the passenger pigeons, or the aurochs?
That's neither water nor food either.
Even if it is the last one, if taking it is the only way to individually profit, then it will be taken.
The only way to preserve an endangered common resource is to make the conservation pay more on an individual basis than immediate harvest. Usually, this is accomplished by imposing stiff penalties such that harvest is a net loss, but that is very dependent on being able to reliably catch poachers. Bribing people to not destroy their own commons also works, but is much more expensive, which is why when this happens at all, the bribes are usually paid out from money that was originally taken from the people being bribed.
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As for the article, my household runs about 180 gallons per person-day, without any extreme conservation measures. We flush every time, plus gratuitous flushes to dispose of dead bugs or simply to refresh the hands-free toilet cleaner product, and take long showers. Our water bill stopped having intermittent spikes and unexplained fluctuations when we put plumbing locks on our outdoor-accessible faucets. Some neighborhood dipshit had been stealing our water.
That, by itself, was no big deal. A cubic foot or two here or there is small change. But they also left the water running while no one who cared was around to turn it off.
If you are forgoing flushes, skipping showers, and such, there is no way you're using more than 170 gallons per person-day without "help".
You could probably make some decent money buying up some faucet locks and then peddling them door-to-door in those water districts.
Not necessarily (with no trees, the island is at the mercy of erosion) save for geological-scale "eventually". And that's not the same, the tree is lost and you need a new tree to take its place, that's not what happens to water unless you dissociate it.
(Over here, no shortage of clean water whatsoever, but per-person usage is much smaller than California average numbers. The average consumer uses 155 litres (41 gallons) per day, which is 4700 litres or 1250 gallons per month.)
When it's pulled from deep, ancient reservoirs that get replenished very slowly it's slowly destroying the reservoir. Given the time-scales involved, where tens of thousands of years or more are required to re-fill these, it's effectively permanent destruction.
Your argument is extremely misleading. It's like saying gasoline isn't destroyed by cars because you can always reverse the process.