NOTE: This post is timestamped Sunday because I want it to be at the top of the page until Sunday night. Posts for Saturday and Sunday morning will appear below this post.
Dear Aguanauts,
Discussion posts allow you to discuss your beliefs on a topic -- to share your understanding, experience and opinions without worrying about what's right, what others think, or whose opinion is more important. (Check out last week's discussion on bottled water.) Most important, the discussion allows us to learn from each other. So...
Tell us your thoughts on water as a commodity, i.e., water for sale.
14 December 2008
Weekend Discussion: Commodity Water
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6 comments:
Gut Reactions: I feel that water can have a price - don't mind paying for my supply from the utility based on quantity. Price perhaps should reflect the cost of the utility in getting it to me and the environmental costs of my use of that water (pollution, taking a scarce resource from ecosystems that need it, etc, etc). Price should be high enough to encourage conservation. I do not ever want to be charged for collecting catchment water on my property and disposing it in an environmentally safe way (watering organic gardens, etc). If I were to collect water and then release it as a nuisance waste product (untreated black or grey water to the sewer, e.g.) then I should pay.
In Southern California water is controlled primarily by politics, instead of being treated as a fungible commodity. The whole southern California water agencies system is the product of sprawl growth politics. If one water agency wouldn't provide developers enough water for their proposed new rural housing developments, they simply funded the organization and chartering of a new, more compliant one, the same as they did with cities. Today, water is sold like a commodity to residential customers, but provided artificially cheaply to governmental, commercial, industrial and agricultural customer more like a right.
Water, like food, is something essential. That is precisely why it must be a commodity, so that the market can allocate it sensibly, protect its quality, and provide the widest possible access to the resource.
Some hand-wringers use the importance of water as justification for insisting it be a public resource, with little or no private right associated with its use and distribution. One need only look at the hideous and tragic record of collective food production schemes to see the folly of this viewpoint.
What confuses and upsets me the most is when activists insist that access to water is a right; that commodity water and private corporations delivering this water is bad; but we are abusing water, and ruining the environment by using too much of it in unsustainable ways.
Yet the price mechanism is clearly the most well known and effective way to regulate the amount of supply and demand for a good or service.
Because of the current financial crisis, there's lots of yelling about "blind faith in the market system". But when it comes to water, there's a lot of blind faith in government, and blind prejudice against the market.
As evidenced by Dr. Shiva, who inexplicable won the Economist debate on pricing water.
http://www.economist.com/debate/overview/133
As far as the actual provisioning of water goes, either public or private agencies can be the right answer. For instance, in impoverished countries, the tax base may be so weak (and corruption so strong) that it would be impossible to raise the substantial capital needed for good water systems to be built, without private investors coming in. In this country, water districts are quasi-governmental bodies anyway, as they have the power to condemn property, levy fees that have the same legal priority as taxes, and themselves do not pay tax. Mutual water companies work fine in some parts of the country, as well. Yes, "it depends".
It occurs to me that governance in India is really terrible. Between corruption and incompetence, what regulations do exist are rarely enforced. Perhaps Dr. Shiva and her ilk are right to oppose water markets in these conditions.
If water is traded without strong markets, and clearly defined and enforced regulations, then excesses, scandal, and misallocation of resources are sure to follow. To encourage water markets in these conditions, wherever they exist (even in the US, from poorly constructed markets), is counterproductive to the goal of pricing and allocating water efficiently, while protecting the poor, etc, etc.
Since reducing corruption and improving governance is such a long and haphazard progress, it seems like we have to find other ways to replace or augment government's role. Perhaps NGOs and public transparency (such as publishing data on the internet) can play a part and even be written into contracts and laws that setup new markets in such risky conditions.
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