Oliver Brandes (120p)
The Primer explains how water pricing works, what the benefits are, and how water utilities can implement conservation-oriented water pricing structures as a key tool in the water manager's toolkit.
Economic and Financial Tools
Because we undervalue our precious water resource, we tend to overuse it and, in fact, abuse it. The apparent abundance of water is deceptive, and the capacity of our lakes and rivers – and even of the oceans – to purify the wastes we dump into them is much more limited than we once thought it was. There is a price for it: billions and billions of dollars to clean up or prevent pollution. It is becoming abundantly clear that water is not a free good. Sooner or later it presents us with a bill: the price of neglect. In many cases we pay less than the actual cost of processing and delivery. For example, irrigation water charges only recover about 10% of the actual costs of the service. The same is true, to a less extreme extent, for water costs to householders.
A 2004 Water Conservation Survey conducted by the Ministry of Water, Land and Air Protection and the BCWWA’s Water Sustainability Committee indicated that few utilities are using any formal economic or financial tools to promote water conservation. The most widely used tool—analysis and study of universal metering or a metering pilot—is employed by just one in three utilities surveyed, and is being considered by just over one in four. Other tools employed include cost/benefit analysis, assessment of pricing structures, and service charges. While assessing pricing structures is not currently widespread, nearly half of utilities surveyed do appear to be considering implementing this in the future.