Who Should Pay the Cost of Fresh Water?

You might think that since fresh water is more valuable than diamonds, there'd be no need to price it. You'd be wrong.

"Free" or subsidized water is bound to be wasted, according to most experts. Why bother fixing the leaky faucet if that would cost more than you'd save? Why buy better irrigation technology if it won't save you money?

No reason. And that's why we hear so many suggestions that water users must pay the price. Easier said than done, in many cases. Sandra Postel, who has studied water policy for many years, observes, "Most water in developing countries, especially in agriculture, is not metered, and you can't charge for volume unless you have a way to measure it." She suggests that rationing or better technology could encourage more efficient use where water cannot be metered.

High-pressure irrigation of crops is more efficient than furrow irrigation, but not as efficient as low-pressure irrigation.
Courtesy Dorchester County Cooperative Extension

The subsidies are "most dramatic in irrigation," which accounts for about 70 percent of worldwide use, says Postel. "In most cases, farmers pay 10 percent to 15 percent of the real cost, or get it free." And because water subsidies usually go only to rich farmers, Postel says they are "not necessarily helpful from a conservation or equity standpoint."

Water subsidies are a fact of life in the western United States. According to de Villiers, they amount to $500 per acre. He alleges that "70 percent of the farmers' profits in California's Central Valley -- which is supposed to be the richest farmland in the world -- came directly through taxpayer subsidization."

These field are watered by furrow irrigation. Note the black gates that control the entry of water from the larger channel in front into the furrows.
Courtesy Mark Finco

Charging for water has dramatic effects, de Villiers adds, causing usage to decline by about 30 percent. However, as water becomes more expensive, farmers may go out of business or plant more profitable crops. That can reduce a country's ability to feed itself.

Privatization: peril or panacea?
In cities, water often arrives in a truck, especially on the outskirts of megacities like Jakarta, Bangkok and Mexico City, where water pipes are absent. Vendors may charge "exorbitant prices for dubious-quality water," says Postel. "Because ...society has not provided water, many are spending one-quarter of their income on water. It's a tremendous inequity caused by the failure to provide for basic needs" (see "Mexico Grows Parched... " in the bibliography.)

The World Bank and other international development agencies have spent a lot of money on water supplies, purification systems, wastewater plants and dams. Money is always short, but even well-funded water projects can fail without good management. In a 1998 interview, John Briscoe, then the World Bank's senior water advisor said, "Right now, there's a huge amount being spent for terrible service."

Many urban water utilities, Briscoe added, "Are run as government departments with no interest in serving users, but only maintaining employment and serving government ministers. They are some of the worst-run public agencies you can find."

One solution, he says, is to put water utilities on a profit-making basis. And while privatization has its critics, it beats not getting water. "The evidence is absolutely clear in my mind," says Briscoe. "For poor people in particular, the worst thing is to be denied access. They are happy to pay a reasonable cost, but not if it's going into the pocket of politicians."

Charging higher prices for piped water may bite the poorest less than expected, says de Villiers, since in many countries, "The only people who have running water are the rich." The poor, he notes, may already be paying high prices to itinerant water sellers. Water fees, he says, pump money into the water infrastructure so water pipes can be laid, and they focus attention on the diminishing resource called fresh water.

Yet water-for-profit is no panacea. Privatization failed in Bolivia's third-largest city, Cochabamba. High prices forced some inhabitants to choose between food and water, and the government cancelled the contract with the private utility.

In terms of household usage, Postel says, "This is not a problem of scarcity, it's problem of political will. The means are there to provide everybody with basic needs, 50 liters per person per day. It's not had a high enough political priority." Poor people who lack access to clean water, "get water from unclean surface ponds or dirty rivers, and they get sick and die."

Can technology help?
Because water is generally used so inefficiently, Postel calls conservation "the last oasis." Simple devices like low-flow toilets can cut usage by 70 percent. When New York City was faced with spending $1 billion on a new pumping station in the early 1990s, it opted instead to replace toilets. By 1997, after the city spent $295 million on incentives, 1.33 million new toilets had been installed, saving 70 million to 90 million gallons per day. Overall, per capita consumption dropped from 195 gallons in 1991 to 169 gallons in 1999.

As it crosses the U.S.-Mexico border, the Alamo River is mainly a memory. Water withdrawals further north for irrigation help diminish the stream here to a green patch on the landscape.
Courtesy Mark Finco

Agriculture, which uses about 70 percent of total fresh water, offers much larger savings. Drip irrigation, pioneered by Israel, delivers water directly to the crops roots. Although it's more expensive to start with, it's far more frugal as well in terms of water. And delivering water steadily to the roots improves production as well. Postel writes, "Studies in India, Israel, Jordan, Spain and the U.S. have shown time and again that drip irrigation reduces water use by 30 to 70 percent and increases crop yield by 20 to 90 percent compared with flooding methods."

Flooding
Reuse of wastewater is becoming a fact of life in many arid regions, including Egypt, Israel, and the American Southwest. Depending on its cleanliness, water may be used to irrigate non-food crops, or even food crops. In the extreme example, Namibia, as we've seen, drinks treated wastewater in drought years.

Desalination -- the removal of salt from salt water -- would be the ultimate solution to water woes -- if it can be done cheaply enough. That's a big if: "The best estimates are $2 to $2.50 per ton for desalination," says de Villiers. "That not really that far from the real cost of delivering water from the Colorado River, but California's water is so heavily subsidized that they are paying 10 cents per ton when the real cost is closer to $2.50 per ton."

Desalination also takes a lot of electricity, de Villiers notes. "Unless somebody comes up with a way to do it with less energy," the cost of more fresh water could be increased global warming.