World Has Enough Water for All, Experts Say—But Only if People Pay

Aliette Frank
for National Geographic News

May 1, 2001

As water resources grow scarce, threatening the way of life for people around the world, a number of scientists argue that to encourage conservation, people need to recognize the true economic costs of water use.

A farmer and his son walk past lettuce irrigation ditches in New Mexico.

Photograph by Adam Woolfitt/Corbis

Among the problems highlighted on Earth Day last month were growing water shortages and the decline of water quality around the world. Reports indicate that rising global consumption rates, poor water management, and increased global temperatures could leave two of every three people in the world affected by water shortages a generation from now.

"By the year 2025, with world population projected to be at 8 billion, 48 countries containing 3 billion people could face chronic water shortages," the World Resources Institute concluded in its recently published Pilot Analysis of Global Ecosystems report.

Some scientists say that whether the world sinks or swims will depend on whether people develop an awareness of the true economic costs of using water. "Water is not a resource that is immune to the laws of economic thinking. As with anything cheap, people will waste it," said John Briscoe, senior water advisor for the World Bank.

Most water management systems reflect only the costs of collection and distribution. But water also provides society with many environmental services whose economic costs and benefits are hidden. Among those services cited by Jaime Echeverria, an economist at the Washington, D.C.–based World Resources Institute, are wetland and forest protection, crop losses from water shortages, the effects of land use on water flows, and the maintenance of watersheds.

A Drink Too Cheap

Scientists from the World Resources Institute and other organizations, including the International Water Management Institute, the Global Water Council, the European Environment Agency, and the International Food Policy and Resource Institute, have been studying the economic valuation of water and other environmental resources.

Their goal is to find ways of calculating the true economic value of water and other resources so this can be factored into social costs at the community, national, and international levels. Doing so, the reasoning goes, should encourage greater water conservation.

The European Environment Agency found, for example, that 75 percent of the water that some households in Albania pay for is wasted because of leakages in the distribution system from the water source to homes.

"When people recognize the true economic value of water, there is an incentive to invest in products and technology that support efficient water use," said Echeverria. This is illustrated by examples at the state level in California and at the country level in Chile.

According to Briscoe, an average farmer in California during the 1993 droughts paid about U.S. 10 cents a ton for water needed for agricultural irrigation, as compared with 3 cents a ton today. As a result, many farmers in California shifted from growing water-intensive crops to more efficient crops, such as alfalfa and grains.

Similarly, a report by the International Food Policy Resource Institute found that after price reforms were implemented in Chile, the average amount of water people used for irrigation decreased by nearly 26 percent.

Greater efficiency of water use for agriculture alone could have large implications for future water consumption. According to the United Nations Food and Agriculture Organization, more than 8 billion people will inhabit the earth by the year 2030, requiring 60 percent more food than today.

The Economics of Water

Incorporating the full economic costs of water into social services requires more effective pricing mechanisms and clearer policies on water rights and access, among other things.

In some cases pricing mechanisms are misguided. In Costa Rica for example, farmers pay for water based not on the amount they actually use but on the number of acres they water. "The farmers have no incentive to invest in efficient water use," Echeverria noted.

Conflicts over cross-boundary water sources are increasingly a problem, especially in the arid Middle East.

Despite these challenges, "There are successful examples out there of how increasing people's awareness of the economic value of water to encourage conservation can be done, and that it does work," said Carmen Revenga, a co-author of the World Resources report.

One notable success story is the Working for Water program in South Africa. The country has shifted from a flat rate for water fees to a system in which people who save water pay less. A "block-terrace" pricing system gives poor people greater access to water at a lower cost, while high-end users pay more.

"We need to think 'economy,'" said Echeverria. "There can be enough for everyone if we give water, the source of life, the value it deserves."



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