Should Water be Priced?

On Thursday I attended the high-level panel on “feeding the billions“. Based on comments by the panelists that were hinting at the importance of “valuing water”, I wanted to get an unequivocal answer to whether or not water pricing was a good approach to manage water scarcity.

2012 Stockholm Water Prize Laureates Seminar. Copyright Patrick Keys, All Rights Reserved.

So, rather than clumsily ramble through a question, I wrote the question out in specific words to try and avoid any weaseling in the responses that I received. It’s not often you have such a high-powered captive audience, and I wanted to make the most of it!

The Question

“There has been a lot of discussion about how food production systems operate in a distorted market. Several people have pointed out that the market needs to allocate food more efficiently and to reduce waste, but cannot do so without a signal of the scarcity of its most valuable input – water. Acknowledging that it will inevitably be a challenge from the human rights dimension, should irrigation water be priced at a nontrivial amount to help manage water, yes or no, and why?”

The Responses

And, here are the video responses in the order of their replies.

Professor Emeritus Tony Allan, Kings College London

Professor Johan Rockström, Stockholm Resilience Centre

Dr. Colin Chartres, Director General, International Water Management Institute

Professor Emerita Rita Colwell, University of Maryland

So interesting to say the least! No consensus, some equivocating, but also some opinions.

Rationing vs. Pricing

Interestingly, the recipient of the Norman Borlaug Award for Field Research and Innovation award Dr. Aditi Mukherjee approached me afterwards and said that pricing water is simply not possible in many developing countries, i.e. India.
She suggested that rationing can achieve the same scarcity signal to a market as pricing does, but that rationing has the characteristic of being politically feasible whereas pricing is not. Now like the panelists, Dr. Mukherjee is very much an expert in her own discipline. That does not mean I cannot disagree, but I am certainly inclined to trust that what she says is fundamentally true.

A signal of scarcity is needed

Another key point she mentioned was that the discussion of pricing agricultural water for subsistence is perverse when considering the food waste and overconsumption in the developed countries. I agree. But, overconsumption is fueled by ready access to cheap food, which is in turn made cheap because the input water has low or not cost. One way (pricing) or another (rationing), any effort to increase water and food security must provide for the scarcity of water to be signaled to the consumer market.
Advertisements

The QANAT: March 22-28

The QANAT

World Water Day: Why business needs to worry “…industrial use of water will almost double by 2030. It currently accounts for 16% of total usage – more than half of it for energy production – and this will grow to a projected 22% by 2030 with China alone accounting for 40% of the additional demand.” BBC News, March 22

Delhi water table falling by 2m/yr “Delhi will soon push up the demand for water even further. That may lead to an unprecedented crisis, with no relief of surplus availability,” said NCRPB member secretary Noor Mohammad. ” Times of India, March 22

Polluted Water Killing, Sickening Millions “…3.7 percent of all deaths are attributed to water-related diseases, translating into millions of deaths. More than half of the world’s hospital beds are filled by people suffering from water-related illnesses, it said.” NY Times, March 22, 2010

Besieged Gaza denied water “The head of Gaza’s water authority says he has plans and the means to import water from other countries until self-dependency is reached, but Israel’s blockade is the only thing in the way.” Al Jazeera, March 22

With War And Neglect, Afghans Face Water Shortage “Only 1.5 million hectares of agricultural land were irrigated in 2002 and an additional 300,000 hectares rehabilitated since — less than half the area irrigated in 1979, when the war began — said the East West Institute think tank in a report last year.” March 24, 2010

Hillary douses Pak’s ire on water; says it’s a bilateral issue “We’re well aware that there is a 50-year-old agreement between Pakistan and India concerning water,” Clinton told a Pakistani interviewer” Times of India, March 24

CHINESE DROUGHT
Although global media has been rather light on the drought in China, the China Daily news website has consistently had excellent coverage. Here is a list of headlines & links:

March 24
Drought paralyzes power supply

Flowers fail to bloom as drought worsens

18M emergency loans for drough-hit Yunnan

March 25
Safe water project fails to quench countryside thirst

Drought affects China’s largest waterfall

Villagers pleading for road to water

China drills more wells, seeds clouds amid drought

Drought challenges grain harvest: Premier

March 26
Yunan’s flower industry wilting

Livelihoods suffer without water

Drought causes severe forest losses in China

Drought-stricken southwest China moves to curb food hikes

HK offers aid to drought victims in mainland

Armed forces help with drought relief in SW China

Climate change threatens Qinghai-Tibet plateau

Artificial rain to ease drought in SW China

China drought to test policymakers on inflation management

March 27
Drought may force villagers to leave homes

Living life by the bucketful

China starts building canal to replenish Yangtze River tributary