Amid an historic drought, Californians are preparing to face the reality of their first statewide mandatory water restrictions. (Reuters)

On Wednesday, Gov. Jerry Brown announced California’s first-ever mandatory water reduction order. Over the course of this next year, cities and towns will have to cut water use by 25 percent compared to 2013 levels, or face penalties.

[“It’s a different world,” Brown said yesterday. “We have to act differently."]

Water is a local issue in the state. There are over 400 local water agencies, each responsible for making sure the taps in their towns turn on. Some of their water might come from the ground; from contracts with the State Water Project; from water rights bought off farmers; or from new reservoirs that the state has been scrambling to build.

As the drought rolls into its fourth year, many agencies have been hunting high and low to find sources of water. They did not need a governor’s order to tell them that they needed to conserve.

“There are already places struggling to get drinking water,” said Nancy Vogel, spokesperson for the California Department of Water Resources. “There are small rural communities that have been hit badly in this drought.”

The seaside village of Cambria, for instance, has been on water rationing since March. Each person gets 50 gallons a day. Households that exceed their limit will be hit with a fine that is quintuple their water bill. If they do it again, the fine is ten times their water bill. In November, officials rushed to open a $9 million desalination plant, which mixes treated waste water. It was expensive to build and is expensive to operate — but people needed water.

“What you’re seeing out here is essentially history in the making,” Gail Robinette, president of the district board, told KSFN-TV.

Then there’s East Porterville, where residential wells have run dry, and hundreds of homes need their water delivered by truck from the neighboring town of Porterville.

“We’re not talking welfare,” a Porterville city council member told the Fresno Bee. “We’re talking humanitarian action.”

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Tulare County, where the town is located, is also trying to scrape together money — about $1.6 million — to drill a deep enough well to supply the homes without water. For now, residents take showers infrequently and wear dirty clothes. Nobody is allowed to pour the emergency water on their lawns — but who in their right mind would do that anyway?

These are the extreme scenarios that California’s other cities are hoping to avoid. Most of them have already implemented water reduction plans. Residents have become used to rules limiting when and how they can water their lawns; how they wash their cars; the kinds of hoses and sprinklers they use; and whether they can fill their pools.

Tom Boswell demonstrates how his new rain recovery system works at collecting rainwater from his roof into 50-gallon drums, then used to water landscaping in Shaver Springs, Calif. (AP Photo/The Fresno Bee, Mark Crosse)

Outdoor water use accounts for a large share of the water that homeowners consume. One of the most successful water conservation ideas: paying residents to swap out their lawns for saguaros. The Southern Nevada Water Authority, which supplies Las Vegas, has been operating its turf-buyback program for over a decade, paying homeowners to turn their lush lawns into desert gardens.

Currently, the rebate is $1.50 for each square foot, which translates into over $10,000 to convert an average lawn. On its website, the utility even offers sample plans. There are kid-friendly yards (“turf play areas for children, trails and plenty of colorful accents”), and yards that are a “color explosion.”

In California, the Metropolitan Water District of Southern California is commonly cited as one of the most innovative agencies. It operates its own lawn buyback program, offering homes $2 a square foot. They also get rebates for buying water-sipping appliances: $85 for a high-efficiency washer; $75 for a rain barrel; $100 for low-water toilets.

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Economists tend to prefer financial incentives over strict rules because it’s more efficient. Just setting a higher price on water is perhaps the easiest option. There’s already a system to measure how much water people use — no need to pay cops to drive around writing up sprinklers.

“My own experience, and the experience in other arenas like air pollution, is that prices are just a much more cost-effective way of achieving a goal like water conservation than efficiency standards,” said Sheila Olmstead, an economist who teaches at the University of Texas at Austin.

In a 2012, Olmstead and Dartmouth economist Erin Mansur suggested that everyone would better off if utilities charged a drought price — maybe double — and then returned most of the profits to their customers. (Most utilities are supposed to make either small profits, or no profits at all.)

This would be far more efficient than ordering people not to water their lawns, or making them buy low-flush toilets, or preventing them from washing their cars. Some residents might prefer watering their lawns, but would give up their swimming pool. Some might allow their lawns to dry up and go brown, but insist on a luxurious morning shower.

Each home could make the tradeoffs that make them happiest, instead of the tradeoffs mandated by the city.

But utilities are reluctant to raise prices on their customers, and often that power is out of their hands. For now, the governor’s water order suggests a traditional menu of water conservation ideas: get people to use more efficient appliances, limit its use on golf courses and cemeteries, that sort of thing.

Cities have been asking citizens to help conserve water with these strategies for a while now. Only, yesterday, the stakes went up.

Correction: California is in its fourth year of consecutive drought.