More Expensive Water? Experts Say a Price Hike Is a Must


Photo via Ever Jean via Flickr CC

Water is one of the most undervalued resources we have. Especially in the developed world, we pay a fraction of the true cost of water in order to have the required resource run from our taps. But really, a barrel of water is more valuable than a barrel of oil at any price, and we're going to see that reality first hand. To ease the inevitable pain and slow our consumption of water to more reasonable levels, experts say that we need to up the price of water now.

According to an article appearing on Business Green and The Guardian, while it's a tricky move and one rife with problems from politics and privatization, upping the price of water now in order to meet demand and improve efficiency is a must-make move.

But because more than a billion people lack access to clean drinking water, and more than two billion lack access to basic sanitation, a price hike will be a controversial issue. Already, the people who have the least money to spend are paying the most for it, from Peru to India. But without moving towards a true cost price structure, the agriculture and manufacturing sectors will continue with incredibly wasteful practices, causing further strain on water supplies.

However, the World Bank held a private meeting in New York with high-level players last week, discussing price hikes.

"Everyone said water must be somehow valued: whether you call it cost, or price, or cost recover," said Usha Rao-Monari, senior manager of the IFC's infrastructure department. "It's not an infinite resource, and anything that's not an infinite resource must be valued."

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While some reports show that simply changing water management techniques and switching to efficient practices is enough to save the day, others recognize that it's not so easy to get people to change their consumption practices - especially with the way water rights run in various areas. Global Water Intelligence ran the numbers in their 2010 market report and found that the industry needs to spend around $571 billion annually - about three times as much as projected spending for this year - to maintain and improve its networks and treatment plants just to meet the rising demand from population growth.

The problem, of course, is how to structure the pricing so that it doesn't harm the poorest households, and instead is felt by businesses and industry sectors that consume the most and need to make the biggest changes to be responsible with water. Some experts point to step pricing, which would protect households who use water simply for washing and cooking, and higher prices for those households - and of course businesses - that consume more.

And then there's the issue of food pricing. If water is more expensive for the agricultural sector, how will our foods with the highest water footprints be priced? Some experts believe that by changing to more efficient use of water by farmers and ranchers, and changes in food consumption habits on the part of consumers, food prices may not have to change that much.

No matter what - if the price changes happen now, in the near future, or at the last minute - we will see a sharp increase in how much we spend on water itself and the goods that consume water. That includes what is produced at home, as well as what a country imports. Right now, the UK imports most of its water, in the form of foods and goods, and those imports are already being eyeballed as a place to make some big changes. Those kinds of changes will be seen worldwide, including the United States as our water crisis comes to a head. It seems more reasonable to up the pricing and get used to the changes now, than face major shortages and the prospect of warring over water.
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More on the Global Water Crisis
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Water Wars or Something Better: Can Water Bring Peace?
Why is Water Such a Big Issue? Global Water Challenge Pres. Paul Faeth Sets Us Straight (Part 1)

Tags: Drinking Water | Economics | Environmental Footprint | Water Crisis

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