“No one washes a rental car” is a truism that suggests that ownership is crucial to stewardship. We also might say, “No one conserves water” for the same reason—too often it’s not clear who benefits from conserving water because it is unclear who owns the water. As long as water’s cheap, why fix the leaky faucet or switch to an efficient irrigation system?

Making the ownership link is relatively easy, because water is already claimed by someone, either a municipality, individual farmers or a government agency. In practice, however, claims compete with one another, especially when water is scarce. Miners and farmers on the Western frontier in the 19th century devised the prior-appropriation system to resolve conflict by moving water to higher-valued uses, and trades between farmers have gone on for a century.

The recent drought in the Southeast has raised a red flag about scarcity. The best mechanism for allocating water is to clarify the ownership among municipal, agricultural, industrial and environmental users and allow trades.