7 May 2013

Yes, charge for water

From a look at the hysterical comments, it seems that a bunch of activists have their panties in knots over the statements by Nestle's Peter Brabeck.[1]

In this video (from 1:55), he discusses whether "we should privatise water supply for the population" and says [paraphrasing] that "water should not be given free (as a human right). It should be priced as a good like food... so that we respect its value. We should take other measures to get water to people without access."

Note that he does not talk about environmental water, nor does he discuss water for irrigation, but his comments do not rule out treating the former as a public good and the latter as a private good.[2] His comments also do nothing to exclude helping poor people get access to water via income tranfers, coupons, smart cards, etc.[3]

Bottom Line: People use more water when it's free; water systems cannot run on zero revenue. Price water and people will use less of it and their water systems can run sustainably.[4]

[1] I'll wager that 95+ percent of these activists now pay to receive clean water. On this topic, RA emailed:
So there's a European Citizen Initiative on declaring
  1. Guaranteed water and sanitation for all in Europe.
  2. No liberalisation of water services.
  3. Universal (global) access to water and sanitation.
So far I have seen big important environmental groups backing this, though I don't see it having any impact whatsoever on more people getting better quality water. At the moment to me this looks like an empty promise without any enforcing behind it. They have enough votes to get it to the European Parliament for a hearing. What do you think?
In addition to what I said above, I think that it's a mistake to run water/sewage as a right, since "positive rights" come with costs. Read my paper for more.

[2] A new, "privately financed" irrigation system in Peru relied on land gifts from the government, and its waters are going to big farmers. I wonder how many subsidies those farmers will end up collecting?

[3] That said, Nestle is definitely interested in making profits. At a crecent conference, one junior exec was proud that Nestle Waters is so popular in Riyadh, Saudi Arabia (where tap water is available one day in five). I asked "what would happen if Riyadh got reliable tap water?" He stuttered for about 10 seconds (this was on a panel) before blurting: "We think it's important for hospitals to have access to our clean bottled water... because we care." Right.

[4] Oh, and don't say "you care" in German. That language sounds sinister. Try French or Italian. People will trust you -- even if you're killing puppies.

H/T to DL