Global water
consumption has tripled since 1950 leading to vast shortages across the world.
It is estimated that 1.1 billion people worldwide do not have access to safe
drinking water. Since North America has 21 percent of the world’s fresh water, most
Canadians and Americans do not understand or appreciate the value of fresh
water. The average American consumes
nearly 350 litres of water a day—twice the global average.
The key challenge
is figuring out how to preserve our precious supply of water and eliminate
excessive consumption. As David Zetland—an
influential water economist currently working at Wageningen University in the
Netherlands—points out in his research, water prices must increase to bridge
the current gap between supply and demand. Zetland discusses water policy at
length on his website www.aguanomics.com
but his solution is to implement a pricing scheme that will eliminate excess
consumption. Zetland
proposes implementing a pricing scheme whereby households would receive the
first 75 gallons of water for free; however, every additional 75 gallons would
cost $5.60. This pricing system would ensure that everyone gets a basic
allocation of cheap water while forcing excessive water users to pay more. This
model follows the basic economic principle that as price increases demand decreases.
Pricing is without a doubt the most effective method to reduce demand because
it directly impacts the end user. Further, through incorporating Zetland’s
model, municipalities would get additional revenue which could be invested in
infrastructure improvements or educational initiatives. Municipalities could
even use their increased revenue to provide subsidies to homeowners for
switching to appliances with lower water consumption (i.e. low flush toilets, low-impact
showerheads, more efficient dishwashers etc).
By Trevor S.
