- It is generally accepted that all people have an inherent right to adequate, clean water. We regard it as a public good. Governments and agencies that charge for water generally only charge enough to cover delivery costs, not for the water itself. Since water is not priced to reflect its scarcity, it gets overused. We know, the higher the price, the less consumers will demand, since prices are lower than they should be, this leads to high demand.
- Another factor in demand is elasticity. The more elastic the demand for water is, the more an increase in price will cause a decrease in use. Residential indoor water is the least elastic, but municipalities that have instigated conservation programs and/or block pricing have seen significant decreases.
- One example is the Irvine Ranch Water District in Orange County, CA. Customers there use an average of 52% less water than customers in other Orange County districts. (See Table in Pricing Section) Increasing block pricing provides a way to reward conservation and maintain revenue by charging below-market costs for a minimum allotment of water and steep price increases for excessive consumption. Their base rate is 55 gallons/person/day.
- The way we price water depends on many factors. There is an inverse relationship between price of municipal water and the amount consumed.
- Total water withdrawals in the US is over 400 billion gallons per day. Although population is increasing, the daily amount of water withdrawn has dropped since 1980. The 2 largest sectors are thermoelectric (38%) and irrigation (34%).
- The U.S. has the highest rate of water usage at 575 liters/person/day. By contrast, the U.K. is 150 L/p/d; Germany 193 L/p/d, and Israel (the most water efficient developed country) 137 L/p/d.
- Conservation saves money and resources. Conservation usually costs less than projects to build new reservoirs, pipelines, and treatment plants. Public conservation can be encouraged by increasing awareness, raising the price of water, providing water audits, and offering rebates and incentives for improvements.
-United Nations Environment Programme (UNEP). Vital Water Graphics