Economist Alex Tabarrok says prices are a signal wrapped in an incentive. Prices tell us about relative scarcity and provide an incentive to conserve on scarce things.

But when we face abundance rather than scarcity, prices may be less useful. And so some of the controversy around the Okuru water export project seems a little odd.

Last year, South Island entrepreneurs started bottling fresh air from the Southern Alps to sell in China. Clean air is abundant here, but scarce in parts of China; nobody worried that the company was not paying for air bottling rights.

Okuru proposes bulk water exports from the West Coast. The project has been on the drawing board since 1990, with initial resource consent achieved in 1992. Okuru is still trying to line up investors and customers to make the project viable, but they need to maintain their resource consents.

The current round of renewals have been controversial because of ongoing debates about water pricing. Critics worry Okuru may profit by getting a valuable water resource for free.

Overall, freshwater management in New Zealand is in dire need of review. A trading regime for water drawing consents seems the most obvious solution. In the meantime, water’s value is bundled into the selling price of land that has water drawing rights.

In places where the aquifers and rivers are under pressure, water bottling plants draw attention far out of proportion to their actual water usage. But at least the sentiment is understandable: in places where water is scarce, it is odd that new drawing does not have an explicit price tag.

But that is manifestly out of place on the West Coast near Haast. Having spent a wet Christmas at a Book a Bach in Haast a few years ago, I’m happy to confirm that water on the West Coast is the opposite of scarce. Okuru’s potential draw is reported at less than a half a percent of the Arawhata River’s typical flow.

And the lack of customers for the project so far suggests that it would not expand quickly.

Freshwater allocation systems need reviewing. And, as Tabarrok would say, tradeable drawing rights let prices emerge to signal the value of water and provide incentives for conservation.

But in places where water is far from scarce, nobody is likely to earn much selling water drawing rights.