The role of water pricing in achieving equity and water security

  • Balancing efficiency and equity aspects of water security
  • Considering the governance situation when discussing water pricing
  • Technical challenges to water pricing reforms

Physical water scarcity is now experienced more often than before, in many locations around the globe, which has renewed the calls for increased efficiency in water use. Raising the price of water is often suggested as a powerful incentive to make water users save on water. A number of places also experience so called economic water scarcity, where it is a lack of functioning infrastructure and not lack of water resources that result in unmet demand. In these places, increased financing can be a useful part of the solution, which can be achieved through cost-recovery from water users.

 

Thus, in several ways, water pricing can be used to achieve water security. Both lower water withdrawals and increased investments in infrastructure would safeguard sustainable access to water. Lower water withdrawals would also help preserve aquatic ecosystems, while the infrastructure investments would help to ensure protection from water-borne diseases and water-related disasters. Water security can in certain respects be seen as the opposite of water scarcity.

 

Reforming a water pricing regime or introducing new water prices can however be a challenging task.King Arthur: Legend of the Sword film

It may be difficult to gain acceptance for increased prices, if an improved service or benefit is not tangible in the short term. It might not be obvious how to best design a new pricing instrument, but a need for adjustments may appear after some years. And if water security is meant to prevail for all groups in society, then not only efficient, but also equitable water use needs to be achieved.  It may not be reasonable to make everyone save on water, in particular households who only use water for their most basic needs. Further, the role of water for socio-economic development needs to be determined, in order to decide for which water users affordability concerns shall be considered (these could be low-income households, small-scale farmers, emerging industries or others).

 

Technical challenges may also be part of the picture. For instance, water meters are required if water prices shall have an effect on the volume consumed. Also, to estimate the scarcity value of water, the value of leaving water in the ecosystem needs first to be determined.

The detailled schedule of the section:

8:45 Introduction, chair person Eiman Karar, Water Research Commission in South Africa

8:50 Tarificación de servicios de agua y saneamiento – la experiencia de Chile, Humberto Peña

9:10 Water Pricing, Poverty and Equity – Scanning for linkages in Southern Africa, Johanna Sjödin, Stockholm International Water Institute

9:30 Pricing the priceless: valuing water for policy, Viju James, IDS Jaipur

9:50 Reflections on the previous presentations and the role of water pricing for equity and water security – the perspective of Brazil,
Marcos Freitas, water resources specialist, ANA, Brazil

10:10 Summary (and invitation to evaluate the session), Eiman Karar, Water Research Commission in South Africa

10:15 Questions and Answers (interaction with the audience)

10:30 End of session

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