Pricing water is a touchy topic in the water world. Access to clean water was declared a fundamental human right by the United Nations (UN). But, does that mean that it can’t be priced for scarcity? What are the implications of not charging end users for treating and transporting water?
Piet Klop, Senior Fellow at the World Resources Institute (WRI) argues that water should not be free. Pricing water appropriately sustains utility services such that they can deliver their service effectively. Funds from pricing water can pay for maintaining infrastructure which is so badly needed, also in the United States.
To some Klop’s ideas seem radical and impractical. To others, his logic is quite reasonable and legitimate. Why does Klop think water should be priced instead of free? Read the Klop’s interview with WaterWideWeb below.
EAB: Should water be free?
PK: No it should not be free. If it’s free, you’ll never get the incentive to use it efficiently. You’ll never get the investments we need to make sustainable use of the scarce water available. It’s a matter of efficiency and investment.
EAB: How can we ensure that pricing water doesn’t disenfranchise marginalized communities?
PK: You can cross subsidize. It doesn’t require all of society to pay large amounts for water. You can shield poor people from paying more than they can afford for a basic necessity. To me these aren’t opposites. You can have water priced at its scarcity value and you can subsidize it for those who can’t pay for it.
EAB: Can you give any examples or anecdotes to support your theory?
PK: Vulnerable communities are already paying much higher water prices than middle classes and elitists already. I lived in Nairobi. We lived in a well-to-do neighborhood. We were connected to the network. You pay hardly anything for that service. Five hundred meters down the road, there’s a slum. The people living there are not connected to the same water network and are dependent on water sellers. they consume much less; yet, per unit of water they pay much more.
EAB: If we’re charging people for water, does that mean we’re compromising the status of water as a human right?
PK: There’s no argument about whether or not people need water. Declaring it a human right doesn’t require that we make it free. There are several things that are human rights, such as shelter and health and we are happily paying for. It’s about treating water as an economic good and not just a social good.
EAB: Are we at the point of pricing water anytime soon?
PK: Paying water at its scarcity value is a long way off. It would require increasing the price of water at 10 times or more. It’s politically unfeasible. Before we get there, we could just pay the cost of water, forget it’s scarcity value. We should charge for the financial cost to pump, treat and discharge it. That way, we’re paying for infrastructure, maintenance, and expansion. But there are still few places in the world where we’re covering just those cost.
EAB: Can you give an example of the negative consequences that occur when water is treated as a social good and not economic good?
PK: Barcelona is a beautiful place. It’s advanced in many respects. But they were down on their luck two years ago. Two years ago, they were shipping in water from France. Water arrived in a tanker by ship. This happened because the watershed which Barcelona is part of is oversubscribed. Water is not sustainably used.
Farmers and others are using more than what is available. As a result, reservoirs dry up. They only pay 2 percent of what it costs to deliver water to their fields. Thus, there is no incentive to use it efficiently. Because farmers are underpaying for water, Barcelona went dry. They had to resort to a desperate measure of shipping in water. This is what happens if you don’t price water economically.
If water is free, people are going to abuse it. Investors are not going to invest in technology.
EAB: There are obviously certain cultural ideas about pricing water. How do you think these ideas impact pricing water?
PK: In the Netherlands, I pay ten times more for water there than I do here. And, the Netherlands has more water. It’s not just about scarcity. In the Netherlands, we got used to the idea that you have to pay for what it takes to deliver water. It’s a culture. It’s something that has been ingrained in the collective psyche. The idea that clean drinking water should be free is self-defeating.
In this country, there’s still an idea that there are no limits. You just go west and start again. In the Netherlands, there’s an idea that we have to make it work with what we have. You have to pay for things that are scarce. Not pricing water is a cultural and therefore a political problem.
EAB: Thank you for interviewing with WaterWideWeb
PK: You’re welcome.
The pricing water debate will continue as WaterWideWeb involves new experts and researchers into the discussion. For now, WaterWideWeb wants to hear from you!
Should water be free?
Why or why not?
If we charged for water, what would the world look like?
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