15 Aug 2014

How should your community manage its water?

MB asked one last question after my AWRA seminar:
You said that each location should decide which system/structure they think is best for their context, but in the places you’ve traveled or studied, have you witnessed any significant effects of culture on selection or implementation of water pricing structures? This could be a "culture of consumption” that certainly exists in many places, but also legacy and tradition of property rights systems, governance/authority, equity? I suppose these could be “negative” or “positive” as we might define them, but I just wanted to cash in on your two cents!
This is a great question, as it focuses on the impact of local politics in determining how to allocate water.

The first question is whether local people face (or realize they face) a problem with over-consumption of water relative to sustainable supplies. In some places, it appears that people have decided that it's ok to use too much water, either because they plan to leave the area, have faith in divine intervention, or plan to take water from some other place or people. In others, people agree to set a limit on water use, to ensure their ongoing, independent existence.

The next question is how to allocate water and costs. In some places, people pursue "from each according to his ability, to each according to his need" policies, i.e., the rich pay for the cost of water services that others use (e.g., Riyadh, Saudi Arabia). In others, people have decided to charge water users much more than the cost of service, i.e., unit water prices exceed the unit cost of service. Both of these systems are problematic. The former relies too much on outside funding while failing to discourage wasteful use of resources. The latter ends up destabilizing utility finances and encouraging extra use.*

My favorite system aligns system costs with billing charges to customers (with the addition of a surcharge if/when scarcity dictates) to protect reliability. I recommend direct income support to poor people in places where people want to help, since "cheap water" is an inefficient way to help the poor.

Bottom Line: Communities manage their water so they should discuss and understand the tradeoffs (to efficiency, sustainability and fairness) in their decisions.

* This may seem paradoxical, but low unit prices mean that people do not pay much attention to how much water they use. Water managers, OTOH, definitely notice aggregate revenues, which they do not want to fall, so they have little reason to discourage consumption.