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.

Monday Re-cap @ World Water Week

After a day of meetings, Opening Plenary events, High Level panels, strategic framework launches, and a City Hall reception – I’m back home and writing a blog entry. To entice you to keep reading, I’ve included pictures 🙂

Summary for Policymakers

In the spirit of high level frameworks and so on, here are some of my reflections from the day:

1. Choosing to trust – At the opening plenary session this morning, one of the speakers was from PepsiCo. The gentlemen was speaking about his and PepsiCo’s enthusiasm for integrating water stewardship into their food production supply chain, particularly where it concerns communities that are around their production facilities. My knee jerk reaction in these situations is to be skeptical about the honesty of these statements, but today I decided to choose to trust their statements. As stated by honored speakers today (including Swedish Enviroment Minister Gunilla Carlsson and many others), engaging the private sector is critical to long-term sustainability; I agree with this in general, and I think in practice, people interested in advancing the responsible and just allocation of water among all users should open their minds to unconventional partners.

Opening Plenary speech by PepsiCo representative, Copyright Patrick Keys 2012, All Rights Reserved.

2. Leave the pre-conceived notions at the door – During a session launching the framework for Water Security and Climate Resilient Development, sponsored by AMCOW (African Ministers Conference on Water) and GWP (Global Water Partnership) and others (CDKN, ADA, etc.), I asked a question about how/why Egypt and Ethiopia were not a part of the program, and whether their conflict may spell a problem for regional cooperation and resilience. I was informed, in somewhat direct terms, by Bai-Mass Taal of AMCOW that ever since January 25th 2011, the whole perception of regional water conflict needs to change. Three key points illustrate this shift: 1. Sudan is engaging Egypt to grow rice in its lands; 2. the Egyptian water minister has made at least two trips to Ethiopia in the last month; and, 3. Egypt has declared that the Nile must be used equitably for development by all riparian states. This is a major shift in policy, and is reflective of a new, hopefully more fully engaged, policy. Lesson learned.

Framework for Water Security and Climate Resilient Development, Copyright Patrick Keys 2012, All Rights Reserved.

3. Disconcerting lack of foresight – During the high level panel on the global rush for land and water today, the Deputy Minister for Food Security (far left below, not pictured on the projector) from Sierra Leone had apparently not thought of including clauses for compulsory land rehabilitation and stewardship for companies to whom his country has signed leases. Though a convincing case was made for the at least somewhat thoughtful leasing process in Sierra Leone, if this Deputy Minister has indeed not heard of this concept of compulsory rehabilitation, then I am shocked. This is resource extraction contracts 101. I’m not comfortable saying that they are learning as they go, since this is their job to know. I hope that this glaring gap in contract creation is an anomaly, rather than the norm.

High level panel on water and land grabs, Copyright Patrick Keys 2012, All Rights Reserved.

If you’ve made it this far, then here are a few more pictures that characterize the day’s events…

My Junior Rapporteur group, “Good Governance for Water and Food” met at 9am this morning. Tomorrow its 8:30. Ouch…

At the opening plenary, I thought the stage looked pretty swanky…

…only then did the Swedish circus performers come out. Surprising? Yes. A little odd? Yes. Really cool? Absolutely.

Also, after the full day’s activities, there was a great reception at Stockholm City Hall. Here is a picture of the “Golden Room” with the “Queen of Lake Malaren” depicted.

I hope to keep this up tomorrow, with lots more information about the general information I’m learning and more pictures of the fun stuff. Till then!