30 Sep 2008

Debate on the Value of Water

The Economist is having an online debate from TODAY until October 10.

Proposition: "Water, as a scarce resource, should be properly market priced."

I was the third to vote (guess which way I voted?!)

Readers can read the pro and con opening statements, comment and debate with the all-star line-up of speakers.

Sep 30: Opening statements and comments and voting open to the public
Oct 1: Michael W. Hanemann (University of California) -- my adviser!
Oct 2: Anup Jacob (Virgin Green Fund)
Oct 6: Colin Chartres (International Water Management Institute)
Oct 6: Peter Gleick (Pacific Institute)
Oct 7: Peter L. Cook (National Association of Water Companies)
Oct 8: Closing statements
Oct 9: Ashok Gadgil (Lawrence Berkeley National Laboratory)
Oct 10: Winner announced

Excerpt from the Pro Statement by Stephen J. Hoffmann (WaterTech Capital & Palisades Water Index Associates):
The pricing of water must go beyond the mechanical and political aspects to the basic factors that affect the relationships between producers and consumers, and that are implicit in the rate structure. The principle of sustainability is critically dependent upon efficiency in water use. And efficiency cannot be achieved without the proper signals included in market prices. Market value is equivalent to water rates based on economic principles of water-resource pricing.
Excerpt from the Con Statement by Vandana Shiva (Research Foundation for Science, Technology & Natural Resource Policy):
The commodification of water shifts the focus from the water cycle on to water markets – diverse species, ecosystems and water systems adapted to millions of years of evolution are replaced by instantaneous relationships between “sellers” and “buyers” negotiating a commodity transaction which determines how water will be used, where it will flow, and where and to whom it will stop flowing. It is assumed that water will flow from “low value” to “high value” use. This increase in “value” (which refers to price) is supposed to magically overcome water scarcity and allocate water equitably.
Bottom Line: Let the debate begin!