12 Sep 2013

Some thoughts on water conservation

KK sent these comments on the entry on "water conservation" that I wrote for an encyclopedia [pdf]. It's in press, so I cannot make corrections/changes, but here are my responses:
  1. First sentence – you note that conservation can be encouraged with price or non-price instruments and then go on to delve into prices, but what I wanted to know is what is Water Conservation? California’s 20x2020 plan describes Water Conservation as “a reduction in water loss, waste, or use” I would suggest starting with something as basic as that.

    Conservation can mean using less or not wasting. These are not the same, since the cost of using less may exceed the benefits (e.g., installing conservation equipment that costs more than the value of water conserved). A larger problem with conservation (one that I did not discuss in the entry) is that conservation in one place may not matter in another. A low flush toilet, for example, may "use" less water in terms of a household meter, but that "efficiency" [I'm using quotation marks here to make it clear that labels do not always represent reality] may not play out. Low flush toilets may lower sewerage system efficiency (clogs, treatment, etc.); "wasted" water can also be treated and returned to the water system or the environment (i.e., no waste).

    My discussion in the entry deals only with reducing water use, not with the bigger problem of when that makes sense.

  2. I’d ask for a more clear distinction regarding discussion of price and non-price instruments (i.e., describe some non-price conservation programs) in the subsequent paragraphs that you distinguish in the first sentence.

    Price mechanisms work with the "slope" of the demand curve, i.e., holding taste constant, they will reduce quantity demanded in accordance with each person's demand elasticity. Some people have inelastic demand because they use water for essentials (drinking, bathing and so on) or because the price of water is so low that it does not register in their use decisions. Non-price mechanisms shift usually try to shift demand in, i.e., lowering demand for water even when the price is the same. These mechanisms include a change in tastes (deciding that short showers are good), changes in technology (low flow shower heads) or changes in habits (wanting a green lawn). Most of these mechanisms take the form of "consumer education" that's delivered in booklets to people who often ignore them. They tend to fail because they are misdirected (i.e., installing low flow showerheads in the guest bathroom) or because the utility doesn't like them (customers who use a lot of water pay more money, which helps cover fixed costs). It's also useful to remember that a higher price can trigger inward shifts in demand by making water use decisions relevant.

  3. My reading of the draft is that it is to largely dismissive of non-price strategies despite the fact the such measures are what nearly all utilities use and very few utilities have the smart meters necessary for demand strategies. Perhaps the encyclopedia entry should be re-titled “Water Meters and Pricing”?

    I'm not reading it as you are. I say "Greater 'awareness' or education can lead people to shut off faucets while brushing teeth or replace water-thirsty lawns with non-irrigated local plants" and "Water meters ... trigger a behavioral response to measurement of use" as well as discussing the interaction of price and non-price factors.

    What's more important (to me) is that utilities have control over water prices and water meters; they have very little control over people's psychology and behavior, which are more strongly affected by news, social media and education. I'd say that the largest force for non-price water conservation is environmentalism, which leads to more recycling, less meat consumption, less driving, and so on. Few utilities are responsible for those attitudes although all of them benefit from customers who have them.

  4. The first sentence of the last paragraph - “People often want examples of success and failures in water pricing and conservation” - gave me the impression that conservation and pricing were two different things, which brought me back to my earlier confusion regarding what is ‘water conservation’.

    They are different things. Success in water pricing means mostly that the price goes up and/or reflects costs. Those changes are more about accounting and fiscal stability than water conservation. I don't know of many utilities that set prices to encourage conservation. Summer prices are one example; tiered prices are sometimes presented with this in mind, but they are also used to subsidize basic consumption in lower blocks (i.e., people who use less water pay less than cost).
Bottom Line: "Water conservation" means different things to different people, and it's hard to be clear and balanced in a limited space. That's why I prefer blogging (with comments!) and public talks with Q&A, to make it easier to match and mesh different experiences and beliefs.

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