Article

Water Is an Economic Good: How to Use Prices to Promote Equity, Efficiency, and Sustainability

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Condensate recovery involves repurposing the water and heat contained in condensate rather than discarding it, leading to significant savings in energy, chemical treatment, and make-up water [2], [5]. According to [5], condensate water is nearly identical to distilled water, with low mineral content and near-zero Total Dissolved Solids (TDS), making it suitable for various applications depending on the volume produced. ...
... Condensate recovery involves repurposing the water and heat contained in condensate rather than discarding it, leading to significant savings in energy, chemical treatment, and make-up water [2], [5]. According to [5], condensate water is nearly identical to distilled water, with low mineral content and near-zero Total Dissolved Solids (TDS), making it suitable for various applications depending on the volume produced. ...
... The results indicate that the TDS value is 1.0 mg/L, which is significantly below the drinking water standard of 1000 mg/L set by the Ministry of Health Malaysia. This extremely low TDS level, close to zero, means that the water is mineral-free, making it corrosive to most metals, particularly steel and iron [5]. At higher TDS levels, issues such as unpalatability, mineral deposition, excessive hardness, and corrosion may occur. ...
Article
Full-text available
This research investigates the feasibility and potential for water recovery from condensate produced by a split-unit air conditioning (AC) system in a commercial building, focusing on Scholar’s Inn UTM (SIUTM) in Johor, Malaysia. The study involves the collection and measurement of condensate water from 243 AC units under various operational conditions. The results indicate that the building can produce up to 4,781 liters of condensate per day, amounting to an annual total of approximately 1,721,160 liters. This significant volume highlights the potential for utilizing condensate as an alternative water source, especially in regions with similar hot and humid climates. Water quality analysis was conducted to evaluate the suitability of the condensate for various applications. The condensate water exhibited a pH of 7.17, Total Dissolved Solids (TDS) of 1.0 mg/L, and a copper (Cu) concentration of 1.1 mg/L. While these parameters indicate that the water is within acceptable ranges for non-potable uses, such as irrigation or cooling tower makeup water, the copper concentration slightly exceeds the standard for potable water, necessitating treatment such as reverse osmosis before consumption. The study’s findings underscore the environmental and economic benefits of condensate recovery, offering a sustainable solution to water scarcity issues in commercial buildings. By integrating condensate recovery systems, facilities can reduce their reliance on traditional water sources, contributing to broader water conservation efforts. Future research should explore the long-term viability and scalability of such systems in various building types and climates.
... Water is a valuable resource and therefore needs to be treated as an economic good (Rogers et al., 2002) . It implies that water should no longer be treated as free resource. ...
... However, Dublin water principles emphasizes that the water utilization will be more efficient if water pricing is more inclined towards full value of water (Savenije and Van Der Zaag, 2002). Full water price can be calculated by including all of the five segments, namely, operation and maintenance cost, capital investment cost, opportunity cost, economic externalities, and environmental externalities (Rogers et al., 2002) (Fig. 7.1). A general tendency in developing countries is to consider only the two costs, namely, operation and maintenance, and capital investments, while calculating the water tariff. ...
... So in total water pricing depends on many more factors The implication of these factors also varies as per location and regions of the world. As per Rogers et al. (2002), the water price should be able to fulfill the following criteria. ...
... Water is a valuable resource and therefore needs to be treated as an economic good (Rogers et al., 2002) . It implies that water should no longer be treated as free resource. ...
... However, Dublin water principles emphasizes that the water utilization will be more efficient if water pricing is more inclined towards full value of water (Savenije and Van Der Zaag, 2002). Full water price can be calculated by including all of the five segments, namely, operation and maintenance cost, capital investment cost, opportunity cost, economic externalities, and environmental externalities (Rogers et al., 2002) (Fig. 7.1). A general tendency in developing countries is to consider only the two costs, namely, operation and maintenance, and capital investments, while calculating the water tariff. ...
... So in total water pricing depends on many more factors The implication of these factors also varies as per location and regions of the world. As per Rogers et al. (2002), the water price should be able to fulfill the following criteria. ...
... This study proposes that water management entities achieve financial selfsustainability to ensure efficient and equitable access to drinking water for the entire population. This can be achieved by establishing a maximum price (P max ) for water users [17,48]. ...
... This study proposes a model based on recovering the actual supply costs, encompassing economic, social, and environmental considerations, to achieve an efficient service and sustainable water resource management [48]. For a water supply company to be economically profitable, the water tariff must be set according to income requirements that allow the supply costs to be covered P max ∼ = C S . ...
Article
Full-text available
This study addresses the financial sustainability challenge of integrated watershed management (IWM) in regions with inadequate water service tariffs. A novel water service tariff model is proposed, incorporating supply costs, water loss reduction investments, and IWM expenses informed by user perceptions. The model is applied to an intermediate Andean city in southern Ecuador, where the current tariff impedes the financial viability of the water utility, reflecting a regional trend. The results indicate a necessary tariff increase exceeding 100% to cover the costs and support IWM. The economic value of watershed environmental services (WES) were estimated at USD 1,505,530.64 per year. This value translates to an average water consumption of 20 m3/user/month, equivalent to a WES of USD 2.60 per month. Despite the users’ willingness to pay falling below the estimated economic value of WES, there is a clear need for implementing incentive programs to promote water conservation and policy adjustments that favor the financial sustainability of water supply companies in developing countries.
... Generating sufficient revenue is essential for meeting the goals of water-pricing policies and sustainable development [19]. Moreover, if water is regarded as a public good and water services as a public service, efforts to improve enterprise efficiency must be paired with equity considerations for local residents [20]. Recent years have seen factors like climate change [21], water accessibility [22], and hydrologic information [23] become increasingly incorporated into the water pricing framework. ...
... To evaluate whether the current water pricing is appropriately determined, it is necessary to understand the key driving factors behind the formulation of water prices [20]. However, little is known about the spatial and temporal dynamics of domestic water prices in Chinese cities and the underlying factors that drive these changes. ...
Article
Full-text available
Given China’s status as one of the most water-scarce countries globally, its rapid development of urbanization and sustained economic growth have led to increasing pressure on the urban water supply. Water pricing is also receiving increasing attention as an important tool for water resource management. This study analyzes the spatial and temporal characteristics of domestic water prices in China and their drivers. To this end, domestic water price data from 285 cities in China were collected. Spatial statistical analysis and geodetector were used to examine the spatial distribution and temporal patterns of domestic water prices from 2007 to 2020, as well as to identify the primary factors influencing these prices. The following results are noted: (1) The national average domestic water price has increased from 2 RMB/m3 to 3.12 RMB/m3, where the northeast and eastern regions have higher prices than the national average, while the central and western regions have lower prices. (2) The spatial distribution of urban domestic water prices presents clear differences characteristic of north–south and spatial agglomeration effects; the high-value area of domestic water prices is mainly concentrated in Beijing–Tianjin–Hebei. (3) On a national and regional scale, the price of domestic water is closely related to economic development, water resources, and resident’s income level. Furthermore, this study revealed that the interaction between pairwise factors played a more significant role in influencing domestic water prices compared with the individual impact of each factor. This finding contributes to a deeper understanding of the spatiotemporal heterogeneity in domestic water pricing and offers valuable insights and guidance for water pricing reform in China.
... In view of this, it relies on profit-maximising private entities to distribute water at the socially optimal level. The accountability of private entities to their customers and shareholders is argued to be more direct and effective than that of the political representatives to the citizens (Rogers et al., 2002;Winpenny, 1994). The underlying implication is that the state has failed to allocate water resources among the citizens efficiently because of the politicisation of resources and regulatory capture (Bakker, 2007;Parker & Kirkpatrick, 2005). ...
... Such commercialisation of water is promoted with the advent of neoliberal policy reforms since the mid-1980s under 'market environmentalism' (Bakker, 2004). In particular, the journey began with the proclamation of water as an economic good in the Dublin Principles-adopted by the United Nations at the 1992 International Conference on Water and Environment (Figueres et al., 2003;Rogers et al., 2002;World Bank, 2004), though there is a long historical evolution (Furlong, 2010). The reform initiatives have had a profound impact on different types of water resources ranging from piped water, raw water, watershed management and transnational water (Furlong, 2010). ...
Chapter
This chapter attempts to develop an alternative framework based on the human–nature nexus in order to comprehend the sustainable governance of water and water resources. Given the water system is complex in nature, the chapter first divides water resources into two categories such as (a) freshwater ecosystem and (b) marine ecosystem. Subsequently, it focuses on various case studies of governance failures in the context of Bangladesh—a developing country—under the two ecosystem categories. It has probed the problem of provisioning to describe the inequality in access to groundwater resources facilitated by the commodification process. The exploration into the wetland resource depletion has demonstrated the failure of governance under the conditions of institutional fragility and power politics. Moreover, the case of governance disputes over transboundary water has highlighted the political contestation over water rights. Finally, the challenges of governing marine (e.g., fisheries) resources sustainably have been examined considering the factors of institutional fragility and technological incapacity.
... Volumetric tariffs could be used to stimulate farmers to adopt more effective strategies such as crop substitution ) and technological innovation . Furthermore, water tariffs can create revenues for suppliers (Saleth and Dinar 2005) and allow for cost recovery implementation (Dinar and Mody 2004;Rogers 2002). ...
Article
Full-text available
We estimated the water demand elasticity through an econometric approach applied to a large dataset of water demand observations for an irrigation water district in the Emilia-Romagna region (Italy). Elasticity has been estimated also by considering subsamples of crops and irrigation technologies. The results show water demand inelastic to price, with heterogeneity among crops and irrigation systems. More precisely, we find higher levels of water demand responsiveness for efficient irrigation systems (drip and sprinkler) than for traditional irrigation technologies such as furrow systems. In the paper we provide various potential interpretations to this heterogeneity among crops and irrigation systems.
... Water prices can adjust and guide the water demand [6], which is one of the important means to solving the contradiction between the supply and demand of water resources [7]. The issue of water-price-driven water resource allocation has received widespread attention from the academic community [8]. Cities and towns in the southern region of China initially explored the methods of setting prices for high-quality water, general water, and recycled water at the practical level of the water market in order to promote the use of a separate quality water supply and recycled water [9]. ...
Article
Full-text available
China has been facing a contradiction between its water supply and demand for a long time, and it is urgent that it builds a "water-saving society". Previous research on water pricing mainly focused on the policy level, only considering the supply and demand sides and ignoring the participation of local governments. Due to the inconsistent approval mechanisms, different times of cost formation, and lack of a scientific pricing relationship between multiple water sources and multiple users, with the current water pricing in China, it is difficult to solve the complex problem of water resource allocation. This study aimed to promote the qualitative supply of water and the reuse of reclaimed water, achieve a high-quality and low-cost water supply, and explore the role of water-pricing mechanisms in the regulation of multi-source water supply configurations. The mechanism of regulation is constructed for the complex, multi-source, multiuser water resource system, and a three-party game model is established among local governments, water supply enterprises, and water users. A reasonable pricing system with a rational price relationship is obtained, and Pinghu City in Zhejiang Province is taken as the research area. The prices of the external water supply to residential users, non-resident users, and special users are 4.48 CNY/m 3 , 6.28 CNY/m 3 , and 7.12 CNY/m 3. The external supply prices for resident users, non-resident users, and special users are 3.81 CNY/m 3 , 5.25 CNY/m 3 , and 6.05 CNY/m 3. The external supply price for non-resident users is 2.62 CNY/m 3 for reclaimed water. The results of the study showed that when the government's contribution did not exceed the amount that it would have been without the inclusion of recycled water and the annual payment of water users did not exceed their ability to pay, the income of water suppliers increased by 69%. The three balanced objectives of rational water resource configuration by the local government, reasonable profit for the water supply enterprise, and reasonable payment by water users have been achieved. This study provides theoretical and methodological support for the implementation of water pricing for multi-source and multiuser water supplies in water-scarce areas.
... Since income may not always be observable, regulators often adopt increasing block tariffs (IBTs). Price discrimination can also occur through cross-subsidies for financially vulnerable consumers (see Rogers et al. (2002), Martins et al. (2013), and Massarutto (2020) for related discussions). Hoque and Wichelns (2013), Pinto and Marques (2015), and Fuente (2019) review the literature on water tariff design and mention various studies that have compared the demand and welfare associated with different tariff structures through simulations. ...
Preprint
Full-text available
The social tariff is a policy that provides water supply and sanitation services at affordable prices for financially vulnerable households. A state regulatory agency of the Brazilian water and sanitation sector conducted inspections and drafted a new regulation to promote the implementation of this policy. This article analyzes the effect of the regulation on the degree of implementation of the social tariff. It introduces an index that measures this implementation. Statistical tests indicate an increase in the implementation of the social tariff in all state regions after regulatory efforts. Econometric models suggest that the regulation increases the implementation of this policy. This article contributes to the literature by highlighting the importance of regulation in the implementation of pro-poor policies.
... Ultimately, economic efficiency and socioeconomic equity do not necessarily go hand-in-hand and should not be conflated. In specific cases, correct water pricing may lead to improved social equity if increased revenue is then used to correct uneven distributions (Rogers et al., 2002). However, as Keohane and Olmstead summarize, "focusing on the net benefits to society as a whole ignores the identities of the winners and the losers-that is, an emphasis on efficiency obscures a consideration of distributional equity" (2007, p. 45). ...
Article
Full-text available
To confront the converging challenges of failing infrastructure, climate change, degraded water quality, and fewer undeveloped lands, many municipalities are establishing stormwater utilities (SWUs) to allocate a dedicated funding source to stormwater management (SWM) services. As a public service, creating a “fair” SWU by defining collective values that reflect community and municipal needs is crucial. However, the prevalent professional discourse surrounding SWUs often conflates “equity” with “economic efficiency” when they are two theoretically separate concepts, which obscure concerns raised by service beneficiaries. This paper unpacks ideas of fairness based on a systematic literature review that frames SWM financing in terms of economic efficiency and SWM services in terms of distributional, procedural, and structural equity. The distinction of which is important to set appropriate expectations between SWUs and beneficiaries.
... This approach was adopted by most countries globally, with the exception of France. 75 However, in the late 1980s, the World Bank and other international organisations began to advocate for the benefits of privatisation in delivering public services. Privatisation introduced a range of challenges, including the complex task of setting tariffs and prices. ...
Article
Full-text available
This paper highlights the importance of water valuation and pricing for sustainable and efficient water allocation and management in India. An efficient water-pricing mechanism could be a tool to address the impending crisis of water scarcity, which necessitates a robust, objective, and holistic valuation technique. Every unit of water consumed for economic purposes has an ecological footprint, and this opportunity cost or externality factor needs to be considered. This paper discusses the importance of considering the bundle of ecosystem services provided by water and emphasises the necessity of capturing externalities through inclusive water pricing. It assesses the Indian scenario, revealing disparities in water pricing across states and the urgent need for an efficient water tariff system to mitigate the growing demand-supply gap. The paper examines two cases in this context: (i) a climate-resilient priced drinking water facility in the Sundarbans that adopts a multifaceted approach to water tariffs that balances efficiency, equity, revenue generation, and sustainability while considering various socioeconomic factors and environmental costs; and (ii) a case in the Upper Ganges demonstrating how the valuation of ecosystem services associated with flow regimes can help in efficient water management. W ater scarcity is a harsh reality in India, especially during the dry season, but the situation has not been captured in terms of annual water availability. India's projected water availability per capita was 1486 m 3 in 2021, and is slated to decline to 1367 m 3 by 2031. 1 In terms of the Falkenmark indicator, 2 this reflects water stress and not water scarcity. a This is lower than the global average of 5500 m 3 per capita. 3,4 If current trends continue, India is on the path to becoming a severely water-scarce country, especially since, while 16-17 percent of the world's population resides in the country, the landmass possesses only 4 percent of global freshwater resources. 5 The water demand-supply gap has three aspects, two temporal and one spatial. The first temporal aspect is the seasonality of annual water availability and demand, with dry season availability being substantially lower than the demand. Second, consistent population growth, urbanisation, and the diverse emerging needs for water are long-term demand drivers, with water availability and supply constraints being created by climate change and declining per-capita availability. The third aspect is the massive regional disparity in water availability in India, with some regions better endowed with water resources than others. 6 Given India's rapidly growing population, demand drivers will emerge amid the increased need for food, drinking water, sanitation, and development facilities. However, the constraints on water supply will be even more binding due to worsening water pollution, frequent droughts resulting from climate change, and poor water resource management systems causing the overuse and depletion of groundwater. Global warming further aggravates these problems, severely threatening future water availability in the region. There is extensive use and wastage of water in agriculture, 7 even as many urban centres remain water stressed. Existing literature reveals that the 'business-as-usual' way of managing water is unsustainable and can lead to a As per the Falkenmark indicator, annual per-capita water availability of less than 1,700 m3 is considered to be a water-stressed condition, while annual per-capita water availability below 1,000 m3 is considered to be a water-scarcity condition.
... This approach was adopted by most countries globally, with the exception of France. 75 However, in the late 1980s, the World Bank and other international organisations began to advocate for the benefits of privatisation in delivering public services. Privatisation introduced a range of challenges, including the complex task of setting tariffs and prices. ...
Article
Full-text available
This paper highlights the importance of water valuation and pricing for sustainable and efficient water allocation and management in India. An efficient water-pricing mechanism could be a tool to address the impending crisis of water scarcity, which necessitates a robust, objective, and holistic valuation technique. Every unit of water consumed for economic purposes has an ecological footprint, and this opportunity cost or externality factor needs to be considered. This paper discusses the importance of considering the bundle of ecosystem services provided by water and emphasises the necessity of capturing externalities through inclusive water pricing. It assesses the Indian scenario, revealing disparities in water pricing across states and the urgent need for an efficient water tariff system to mitigate the growing demand-supply gap. The paper examines two cases in this context: (i) a climate-resilient priced drinking water facility in the Sundarbans that adopts a multifaceted approach to water tariffs that balances efficiency, equity, revenue generation, and sustainability while considering various socioeconomic factors and environmental costs; and (ii) a case in the Upper Ganges demonstrating how the valuation of ecosystem services associated with flow regimes can help in efficient water management. W ater scarcity is a harsh reality in India, especially during the dry season, but the situation has not been captured in terms of annual water availability. India's projected water availability per capita was 1486 m 3 in 2021, and is slated to decline to 1367 m 3 by 2031. 1 In terms of the Falkenmark indicator, 2 this reflects water stress and not water scarcity. a This is lower than the global average of 5500 m 3 per capita. 3,4 If current trends continue, India is on the path to becoming a severely water-scarce country, especially since, while 16-17 percent of the world's population resides in the country, the landmass possesses only 4 percent of global freshwater resources. 5 The water demand-supply gap has three aspects, two temporal and one spatial. The first temporal aspect is the seasonality of annual water availability and demand, with dry season availability being substantially lower than the demand. Second, consistent population growth, urbanisation, and the diverse emerging needs for water are long-term demand drivers, with water availability and supply constraints being created by climate change and declining per-capita availability. The third aspect is the massive regional disparity in water availability in India, with some regions better endowed with water resources than others. 6 Given India's rapidly growing population, demand drivers will emerge amid the increased need for food, drinking water, sanitation, and development facilities. However, the constraints on water supply will be even more binding due to worsening water pollution, frequent droughts resulting from climate change, and poor water resource management systems causing the overuse and depletion of groundwater. Global warming further aggravates these problems, severely threatening future water availability in the region. There is extensive use and wastage of water in agriculture, 7 even as many urban centres remain water stressed. Existing literature reveals that the 'business-as-usual' way of managing water is unsustainable and can lead to a As per the Falkenmark indicator, annual per-capita water availability of less than 1,700 m3 is considered to be a water-stressed condition, while annual per-capita water availability below 1,000 m3 is considered to be a water-scarcity condition.
... Given that this is among the first efforts to discuss human modification of atmospheric water using an economic goods framing (Keys, 2021), there is much yet to do to understand its dimensions, critique the framing, and deploy empirical tools to test hypotheses. First, there is already considerable scholarship surrounding water as an economic good more broadly (Rogers et al., 2002;Savenije, 2001;Savenije & van der Zaag, 2002), and these ideas could be brought to bear more fully to think about atmospheric water specifically. This could include reflection from similar types of 'source-sink' relationships such as watersheds that incorporate upstream and downstream ideas into their study (Jansson et al., 1999), as well as the payment for ecosystem services literature (Jack et al., 2008). ...
Article
Full-text available
Non-Technical Summary Human societies are changing where and how water flows through the atmosphere. However, these changes in the atmospheric water cycle are not being managed, nor is there any real sense of where these changes might be headed in the future. Thus, we develop a new economic theory of atmospheric water management, and explore this theory using creative story-based scenarios. These scenarios reveal surprising possibilities for the future of atmospheric water management, ranging from a stock market for transpiration to on-demand weather. We discuss these story-based futures in the context of research and policy priorities in the present day. Technical Summary Humanity is modifying the atmospheric water cycle, via land use, climate change, air pollution, and weather modification. Historically, atmospheric water was implicitly considered a ‘public good’ since it was neither actively consumed nor controlled. However, given anthropogenic changes, atmospheric water can become a ‘common-pool’ good (consumable) or a ‘club’ good (controllable). Moreover, advancements in weather modification presage water becoming a ‘private’ good, meaning both consumable and controllable. Given the implications, we designed a theoretical framing of atmospheric water as an economic good and used a combination of methods in order to explore possible future scenarios based on human modifications of the atmospheric water cycle. First, a systematic literature search of scholarly abstracts was used in a computational text analysis. Second, the output of the text analysis was matched to different parts of an existing economic goods framework. Then, a group of global water experts were trained and developed story-based scenarios. The resultant scenarios serve as creative investigations of the future of human modification of the atmospheric water cycle. We discuss how the scenarios can enhance anticipatory capacity in the context of both future research frontiers and potential policy pathways including transboundary governance, finance, and resource management. Social Media Summary Story-based scenarios reveal novel future pathways for the management of the atmospheric water cycle.
... The unavoidable mismatched nature of water distribution between competing uses and consumers has resulted in the contemporary inequalities of privileges and control among participants. These scuffles and illegitimate use of power by state officials fused into water distribution serve as significant obstacles to any execution of IWRM in South Africa (Munnik 2020; Roger et al. 2020). Furthermore, public participation and engagement, which are the foundation on which IWRM is built, have been reduced to public consultation and political activities (Malaza et al. 2019). ...
Article
Full-text available
The water sector in South Africa is faced with numerous challenges, among which include; increased flooding and prolonged droughts caused by increased climate variability, rapid population growth, unsustainable water demands and withdrawals by various water users, deficiencies in institutional management and infrastructural maintenance, lack of political will with accompanying high levels of corruption and steady deteriorations in all sub-sectors of the economy. Other significant challenges include provision of water in rural communities, water pollution especially from poorly operated wastewater treatments works, acid mine drainage, nutrients from agriculture, siltation of dams. A combination of these factors has led to high levels of water scarcity and an immense burden on the water supply. However, it must be noted that in 1994, South Africa (SA) embarked on developing numerous policies and strategies to address water challenges. While some levels of success have been achieved in terms of policy formulation, there is, however, a lack of comprehensive coordination and synergy that cut across the broad objectives of these policies in meeting environmental, social and economic targets and aspirations. Additionally, the implementation of the policies and programmes is stalled by structural, systemic and institutional factors, coupled with new challenges arising from climatic variabilities. Using a combination of qualitative and quantitative methods together with rapid appraisal of existing literature, we explore systemic and institutional factors impeding the implementation of policies and strategies designed to drive South Africa's water sector as envisaged within the National Development Plan of 2012. We argue that the water sector is faced with multifarious and interweaving challenges such as inadequate human capital, changes in climatic conditions, limited financial resources, infrastructural deficiencies largely linked to poor urban planning and rapid growth of informal settlements, rampant corruption and mismanagement, lack of stakeholders' involvement and compartmentalisation of institutions. This paper, therefore, recommends a community-based approach that enforces transparency and the participation of civil society, cross-sectoral cooperation and a broad range of stakeholders and decentralisation of policy implementation strategies.
... In 1992 the Dublin Water Principles claimed "water as an economic good" for the first time in a UN setting. In the late 1980s the World Bank and other multilateral and bilateral institutions discovered the virtues of "privatization" in the provision of public services and with privatization all of the attendant problems of setting tariffs and prices (Rogers et al., 2002). Water is often a scarce commodity and at the same time a basic necessity. ...
Article
Full-text available
Consider a water supplier who determines sales rates with the goals of maximizing profits, protecting consumer welfare, and ensuring adequate future water supplies. Buyers are differentiated and can use the water for domestic, agricultural, and industrial purposes. We propose a leader-follower finite-horizon differential game. The leader (the water supplier) determines the selling price and the followers (consumers) react by requesting their optimal amount of water. We calculate a feedback Stackelberg equilibrium assuming that all user demand is satisfied (interior equilibrium). We compare two different tariff schemes: linear tariffs (the price paid is a multiple of the volume of water purchased), and increasing block tariffs (the unit price is lower for quantities of water that do not exceed a fixed threshold). We show that block pricing is never optimal and linear pricing is always preferred.
... For instance, in most countries, the conventional command and control system employed for water management necessitates substantial government involvement due to the need for comprehensive, hands-on monitoring and measurement. On the contrary, the implementation of price policies necessitates significant government intervention to ensure that concerns about equality and public goods are adequately addressed [71]. ...
Article
The primary objective of this article is to present the Government of Pakistan's perspective on accomplishing sustainable water management through the UN SDG-6 roadmap. It provides an in-depth review of Pakistan's water reserves and the associated challenges faced in effectively managing these resources.
... Based on utility theory, citizens prefer the SC service with the greater utility (Slovic, 2020). An economic good generates utility based on its usefulness in fulfilling a consumer's wants or needs (Rogers et al., 2002). In the context of SC, citizens' preference for SC services represents the satisfaction or utility they derive from the SC service (Slovic, 2020). ...
Article
The development of sustainable smart city (SC) services is often carried out with limited resources, but there is little discussion about the strategic priority of promoting SC development from the citizens’ perspective. This study developed a decision-making approach to determine the supply and demand priority of SC services using utility and need theories, with Hong Kong as a case study. The results show that smart environment services should be prioritized for all population groups, while the differences in priority among older adults, people with lower digital literacy, and people with lower income were relatively small. On the one hand, the supply of SC services should be prioritized for those that are closely linked to citizens’ daily lives, have a long-term impact on communities, and are targeted to large user groups. On the other hand, priority should be given to those services that meet citizens’ demands for physiological, safety, and self-actualization needs. This study enriches the theoretical framework of people-centric SC research through the innovative integration of Bradley-Terry and rank-ordered logit models for determining the development priority for SC services, which can serve as a practical decision-making tool for policy makers to effectively allocate resources for sustainable SC development.
... Podorejo (82) and Tegalsari (81) have high economic indices, indicating efficient financial management and appropriate tariffs, which can significantly contribute to the sustainability of wastewater treatment. Pedalangan, on the other hand, has a lower score (61), implying that improved economic strategies are required [13]. ...
Article
Full-text available
Current sanitation initiatives in Indonesia focus on community-based sanitation to promotes ownership and understanding of sanitation systems. However, the community has faced numerous challenges in maintaining the socio-economic and technical aspects of the community-based wastewater treatment system (CWWTP) in operation. This study aimed to identify and analyse the sustainability dimensions of CWWTP in Indonesia. In this study, a set of sustainability index (SSI) tools was proposed to evaluate the sustainability of CWWTP, which included environmental, social, economic, technological, and institutional aspects of the sanitation system. Rapid appraisal for fisheries (RAPFISH) method was adapted to evaluate the multidimensional scaling (MDS) approach within the proposed SSI. The applicability of developed SSI was demonstrated by evaluating the implementation of three CWWTP in Semarang district. Data was collected through direct observation, questionnaires, interviews, CWWTP design evaluation, and water quality analysis. Major findings indicated that Tegalsari CWWTP have higher sustainability index, while Pedalangan and Podorejo need to enhance technical efficiency, institutional structure, and community engagement. The leverage analysis identifies key performance drivers in the CWWTP management including operation & maintenance, user acceptance, O&M expenses, community involvement, and effluent water quality. This paper highlights adequate tools for sustainability assessments of CWWTP in Semarang district. Methodology and dissemination of the obtained results can be applied to other rural communities in Indonesia.
... SUNASS also approves the Tariff Studies for each EPS and UGM. Tariffs should reflect the total long-run economic cost of water and sanitation services, including the costs of investment, operation, and maintenance (Rogers et al. 2002;Olmstead and Stavins 2009). To this end, based on an Optimized Master Plan (PMO, for its acronym in Spanish), 8 SUNASS applies a hybrid regulatory scheme, which combines efficient-firm regulation, cost regulation and yardstick competition. ...
Article
We study the willingness to pay (WTP) for a large set of improvements in water service related to quality, continuity, and securing access for people with no house piped water during the COVID-19 pandemic. Using primary survey data from urban Peru, and the contingent valuation method, we estimate a mean WTP of around PEN 4.3 (USD 1.05), 3.7 and 1.8, respectively, for the aforementioned sets of improvements, with the combined WTP representing a 23% increase in the households’ water service monthly bill. The WTP for all sets of improvements is influenced by the expenditure in bottled water (a substitute for tap water, generally perceived as unsafe) and a proxy for household assets. The influence of the individual characteristics typically scrutinized by the literature (e.g., sex, age, and education) varies with the type of improvement examined. We find a significant heterogeneity in WTP across providers and calculate the users’ contribution to a water fund that could crowd-in the public investment in water services’ upgrades. We further discuss the implementation of such water fund.
... 114 However, past research on water rates has determined that cost recovery, a requirement of public utility commissions in several states, is the leading determinant of water rates. 115,116,117,118 This provides evidence that cost recovery and water pricing driven by supply-side costs is a priority for municipalities. This is not surprising as traditional public utility accounting principles promote revenue neutrality and use pricing as a means of recovering the costs of a water system. ...
Technical Report
Full-text available
In 2021, the Illinois General Assembly commissioned the Government Finance Research Center (GFRC) at the University of Illinois Chicago (UIC) to conduct a “Water Rate Setting Study.” This report is the first project deliverable and focuses on the Lake Michigan Service Area (LMSA). Throughout this study, the GFRC researchers received guidance from an advisory committee composed of representatives from state government agencies, municipal and private water utilities, environmental justice and consumer advocacy organizations, and others.
... In addition, the literature asserts that metering can help nudge people to reduce their consumption (Rogers et al., 2002;Fielding et al., 2012). In this light, underpinning the concept of metering for water efficiency is a psychology behind how the water meter changes people's perception, value and use of water (Russell & Fielding, 2010). ...
... As Rogers et al. (2002) affirm, this is not only an exclusive situation in Brazil, since also in other countries water is underpriced, not internalizing externalities, and generally leading to an unsustainable use of water resources, but declaring that if properly managed, this instrument has the potential to promote economic efficiency and social equity. ...
Article
Full-text available
Water scarcity is probably one of the greatest challenges imposed on modern societies and Alto São Marcos, a water planning unit located between the Federal District and the states of Goiás and Minas Gerais, represents well the conflicts that involve multisectoral water dispute as a resource. The conflict observed in this region is configured as a potential pilot case for the application of economic instruments for the management of the resource, being necessary, however, before, an adequate characterization of the economic environment, its dilemmas, and challenges. Thus, the objective of this work is to characterize the dispute between the irrigating and electric sectors, to present the history of the regulatory evolution of the instruments adopted, and to discuss the dilemmas and challenges imposed. To carry out this work, a contextualization of the basin was initially proposed regarding its main economic activities demanding the scarce resource; elaboration of a history of the main normative events tangent to the basin; and, finally, the identification of challenges to conflict resolution. Therefore, from the methodological execution, it was found that the complexity of the conflict crosses institutional limits and demands regulatory articulation between local and national priorities, in search of water security for the planning and expansion of uses. Situation that shows the importance of economic studies on the water and multisectoral remuneration dynamics in Alto São Marcos.
... If we are to value water as a resource and reflect the complete value that water provides to nature and humans, both directly and through ecosystem services, then it is a logical consequence that consumption of water is prioritized in line with the value this consumption provides. This requires the ability to define and measure the value of the catchment across the realms of environmental, societal and economic value (for example via ecosystem services (Costanza et al., 2017;Pissarra et al., 2021) or a multi-capitals approach (Dasgupta, 2021;British Water, 2022) as part of a total cost recovery model (Rogers et al., 2002;Kanakoudis et al., 2011;Mumssen et al., 2018;Berbel and Expósito, 2020). ...
Article
Full-text available
Water is a resource essential for all life and on which society depends but undervalues. This paper presents theories on methods to pivot from linear, extractive uses of water to considering water as a high value, circular resource. Analysis of the literature, which is primarily focused at the abstractor scale, has highlighted the prioritization of human water rights over environmental needs without incorporating the ramifications of environmental degradation and the complexities of applying a market-driven approach to a heterogeneous resource particularly at the domestic consumer level. A discussion of the relationship between society and water, in particular mechanisms that have been used to reduce water consumption, highlights the complexity of this issue and the need to consider fairness and equity at the global and local scales. A comparison of global, urban water supply and sanitation costs shows the extensive variation in the amounts of water consumed and the prices paid at the domestic consumer scale. Finally, a series of hypotheses are presented that, with local development, testing and refinement, are posited to bring about change in the value society places on water.
... The value of water is composed of several components some of which are not easily monetized (Rogers Peters et al., 2002). When water can be considered as a variable input in production, the value of water can be estimated by the value of the marginal product -that is, the value of an additional quantity of product due to the use of an additional unit of water). ...
... Second, supplying water, typically, requires expensive-to-build 'grey' infrastructure, such as dams to store water, treatment plants to ensure water is of an acceptable quality, and distribution systems to deliver water to water consumers and waste-water treatment. To ensure that water suppliers have all their costs covered, which is necessary to incentivise them to undertake future investments in water supply infrastructure, capital costs must be fully recovered (Rogers et al., 2002). The marginal cost of water supply, however, does not include fixed or capital costs. ...
Article
Full-text available
This review examines key economic concepts in relation to the price and value of water for the supply and demand of household water. It responds to a series of questions about water and how it is used. These include (1) Why water is (or is not) priced and valued (or not)?; (2) What are the key economic concepts for pricing water?; (3) How is water priced and how are water supply assets valued for full cost recovery?; (4) Who bears the costs and enjoys the benefits of water use?; and (5) When is the price of water expected to change? Examples are provided to demonstrate the universality of the economic concepts while highlighting how their application must be bespoke and account for different socio-economic contexts and bio-physical conditions where water is supplied and demanded.
... Ignoring operation costs can underestimate the value of water and lead to the misallocation of resources (Rogers et al. 1998). The resource is utilised most valuably when the water allocation reflects its full cost (Rogers et al. 2002). Municipal water utilities have traditionally set water prices to cover the average cost (Pint 1999). ...
Article
The present study aims to estimate the marginal cost of potable water supply and analyse the implications for more efficient, equitable and income-adequate tap water tariffs in Tunisia. Furthermore, this article aims to develop a new pricing model for potable water. Pricing by the Tunisian water utility focuses on setting water prices to cover average costs, often using designs that increase clogging rates. This results in a large volume of potable water being wasted. To facilitate the efficient estimation of pricing models, we attempt to introduce generalised translog (GT) cost specifications for multiple products including Box-Cox transformations. It turns out that the marginal social cost of providing a cubic meter of water must consist of two components: volumetric charges, at €0.048/m3 , and connection water charges, of €0.055/km.
... The diverse techniques of optimization and their applications in water resources engineering, especially water use in agriculture, have been comprehensively reviewed by some researchers (e.g. Yang et al., 2006;Hoekstra & Chapagain, 2007;Rogers et al., 2002;Playán & Mateos, 2006). In a study on irrigation water use management and optimization in the Jordan valley, Al-Weshah (2000) estimated the value added per m 3 water. ...
Article
Full-text available
This research is an attempt to determine the agronomic plan, shadow price, and final value with an emphasis on the optimization of water use in five main agricultural regions of Kerman province (Kerman, Baft, Bardsir, Bam, and Jiroft) and five crops (wheat, barley, potato, onion, and tomato). Analysis was based on three scenarios: (i) current planting conditions, (ii) profit maximization considering the constraints of required water and land, and (iii) profit maximization considering the constraints, including land and local consumption constraints. The results revealed that wheat and barley are eliminated from the planting pattern when water and land constraints are applied (Scenario 2), but other crops gain more planting area. Under all constraints (Scenario 3), barley is eliminated from the planting pattern, but other crops will not have changes in the cultivation area.
... While commons theory does attempt to address the issues stated above, there are "gaps" in the "promise of common pool resource theory and the reality of commons projects," as Saunders (2014) puts it. Such "failures" have provided scope for arguments such as water should be treated as an economic good to be priced and not as a common good (Rogers et al., 2002). To address this issue, we need both a micro-level theorization and an empirical understanding of the process of collective action. ...
Article
This article situates the empirical context of small freshwater bodies in the theoretical debates of commons and political ecology to understand the processes of institutionalization. We argue that a “politics of empty space” operating in the policy narratives and the practices have resulted in a partial decommodification of rural waters in Kerala. The communities, especially the oppressed and the marginalized, have managed to co‐produce ecological assets like rural ponds. Such efforts towards re‐embedding the economy in the society could be a starting point to address the water and the larger environmental crisis that we are in today. 本文将小型淡水水体的实证情境置于公地和政治生态学的理论辩论中, 以理解制度化的过程。我们论证认为, 在政策叙事和实践中运作的“空白空间政治”(politics of empty space)已导致喀拉拉邦农村水体的部分去商品化。社区 (尤其是受压迫和被边缘化的社区)已经设法合作生产农村池塘等生态资产。这种将经济重新融入社会的举措可能是解决我们今天所处的水危机和更大的环境危机的起点. Este artículo sitúa el contexto empírico de los pequeños cuerpos de agua dulce en los debates teóricos de los comunes y la ecología política para comprender los procesos de institucionalización. Argumentamos que una “política de espacio vacío” que opera en las narrativas de políticas y las prácticas ha resultado en una desmercantilización parcial de las aguas rurales en Kerala. Las comunidades, especialmente las oprimidas y marginadas, han logrado coproducir activos ecológicos como estanques rurales. Dichos esfuerzos para reintegrar la economía en la sociedad podrían ser un punto de partida para abordar el agua y la crisis ambiental más grande en la que nos encontramos hoy.
... Thus, the annual water collection is not sufficient to finance the implementation of measures, programs, and projects for the improvement of the respective basins. Rogers et al. (2002) reported that this system is not sustainable and contested that the supply and O&M costs should be the minimum that is covered by the tariffs. Massarutto (2007) and Pinto & Marques (2016) suggested that opportunity costs and economic externalities should be considered in addition to the supply and O&M costs to fully recover the economic costs, also it is possible to add the environmental dimension for a full cost recovery. ...
Article
Full-text available
Economic instruments, such as water charges, have been used to promote water conservation and raise funds for basin management. However, there is a need to improve the water collection model in Brazil. The aims of this study were to analyze the evolution of raw water charges in the State of Ceará and verify the effect of drought on the costs and water collection from 2011 to 2019 to answer two questions: does the water collection fulfill its function of financing the water resources system? Is the pricing model flexible to absorb the effects of climate variability? We conducted a content analysis to determine the presence of certain words in selected documents, and then analyzed the costs of system operation. The results show that the payment capacity is lower than the tariff applied to water. The Status Index is negatively correlated with the Administration (ADM) and Operation and Maintenance (O&M) costs. The generated revenue is mainly used to cover the management costs (ADM and O&M); however, it is insufficient to finance the implementation of measures, programs, and projects to improve the water management in respective basins. Thus, a floating tariff should be established in which the water scarcity and effects of climate variability are incorporated.
... For processes under developments like SCOP, the investigation of the water requirement and possibilities for looping back the water within the processing system may aid in the management of water resources for sustainability. Also, it must not be ignored that water is an economic good with both opportunity cost and market cost (Rogers et al., 2002). Developing process systems with water recyclability and on-site water treatment is a win-win situation for the industry and the environment. ...
Article
Effective water resource utilization and sustainability for industrial operations is a growing concern. With increased industrial water demand, abstraction and water quality changes are rising. In India, distilleries generate more than 40.4 billion litres of effluent daily within the fermentation industry. Water, a public good with market and opportunity costs, needs effective mapping and management. Emerging distillery processes such as yeast lipid fermentation, if developed along with water sustainability, could aid in advancing water resource management. In the scope of this idea, the present study focuses on assessing the water footprint and water quality mapping for Rhodotorula mucilaginosa IIPL32 lipid production using crude glycerol, a by-product of the biodiesel industry. The assessment was based on primary data generated during the 500 L plant scale operation. The process's blue water footprint was assessed by applying a chain-summation approach, and the grey water requirement was determined by measuring water quality parameters for the effluent streams. The process's net blue and grey water footprint were estimated to be 3.87 and 23.66 m3 water/kg of lipid, respectively. Water quality index ratings were identified for all the respective water streams within the processing system, and human risk factors were estimated. The results suggested proper treatment of the spent broth, whereas the secondary effluent stream from cleaning operations could be reutilized within the system. Quality mapping also suggested that the effluent's high organic and mineral load can be processed for water and material recovery, which may significantly reduce the process's grey water and pollution load.
... Through the integration of water, energy, and food policies at both the federal and state levels (A1), as well as political will and transparency (A2), all respondents agree that it is important to include WEF in policy arrangements, and 57% of respondents believe this element is very effective in addressing WEF challenges. The result is in line with a study by International Water Management Institute (IWMI) in Cambodia, where the WEF framework helps in identify synergies and trade-offs between nexus-livelihoods components in Tonle Sap Lake system (Rogers et al. 2002). ...
Article
As water is essential for rice cultivation, growing more rice with less water can be a challenge. A water footprint (WF) is an inclusive measure of freshwater use that can be used to evaluate the impact of human water consumption on both water volume and distribution. In the present study, WF was opted as an indicator for direct and indirect water consumption calculation of rice production at Muda Area, which is the largest rice granary in Malaysia for five consecutive years from 2011 to 2015. The boundaries were set based on resource input and output within the Kedah River basin. A life cycle assessment (LCA) framework analysis was applied, and the WF efficiency of agricultural water resources was discussed to represent its upgrading units. In addition, the findings from this study were cohesively related to energy and food components. The paddy plantation assessment showed that a very large amount of fresh water around 2500 L/kg was used in the paddy plantation. This unique study is the first of its kind to assess the mediation effect of WF in the area between climate factors and crops among Muda irrigation schemes in Malaysia and determine sustainability. In a changing climate, this study illustrates how WEF factors interact with WF and has significant implications for food security, crop production, and malnutrition. This research is essential for knowledge purposes and agricultural development in Malaysia. Consequently, it can become the baseline for other agricultural activities in Malaysia.
Chapter
Who gets water, when, how, and under what conditions are fundamental questions before every society, since water is vital for life, good health, and development. India, the most populous country and a fastest growing economy is facing the twin issues of scarcity and allocation of water, as it needs to manage the water requirements of a larger population with just 4% of the water resources. Together with relative and absolute water stress and scarcity, there is the mounting demand for water for domestic uses, agriculture, commerce, and industry, pollution, decline of water bodies, impacts of climate change, sectoral conflicts, and disputes regarding sharing of water resources. So a strategically scarce resource having alternative uses is to be distributed to a population that is diverse, socially, culturally, economically, and politically. When the multiple uses associated with water make its allocation complex, the degree of inclusiveness and exclusiveness in access to water makes it more complicated. This necessitates a policy framework that can address the issues of social equity, efficiency, and ecological sustainability simultaneously, within the broader context of water security.
Chapter
A review of artificial intelligence's (AI) impact on the realization of the sustainable development goals is necessary given its emergence and steadily expanding impact across many sectors. The authors discover that AI may facilitate the fulfillment of 134 targets for each of the goals using a consensus-based specialist elicitation process. It can also inhibit the achievement of 59 targets. However, current research priorities ignore crucial elements. In order to support AI's rapid development and promote sustainable development, regulatory oversight and knowledge are required. Inability to do so might lead to lapses in ethics, safety, and transparency. Generally speaking, there is no disputing that two significant developments are accelerating in the world we reside in: the rapid advancement of artificial intelligence and an increasing realization of the importance of sustainable practices.
Article
Municipal water utilities across the United States establish their own rate structures to cover operations, maintenance, depreciation, and outstanding debt repayment. Yet, little is known about how rates are determined to ensure equity and/or affordability. To identify sources of variation in residential drinking water rates, we examine municipalities in northeastern Illinois, 2015–2019. Controlling for water utility characteristics, billing structures, financial management, service quality, and demographic/socioeconomic factors, we find no statistically significant correlations between water rates and median household income or race when nonrevenue water from leaking infrastructure is considered, revealing relative racial equity in water pricing within these communities. A larger water distribution network, more water included in the base charge, and a greater number of months in the billing cycle are all associated with lower rates. Purchasing water through an individual or cooperative agreement, a greater proportion of nonrevenue water from leaking infrastructure, a higher minimum monthly base charge, and more revenue debt outstanding (while controlling for nonrevenue water) are all associated with higher rates. We also find a positive correlation between municipal sewer rates and drinking water rates that supports findings from prior research. Overall, our research aids in the development of public policy that ensures all households have access to affordable and safe drinking water to promote water equity and public health.
Article
This research paper conducts a comparative analysis of water reuse practices in the United States and water challenges in Africa. The United States exemplifies successful water reuse through advanced technologies, robust policies, and community engagement, while Africa contends with multifaceted challenges, including scarcity, pollution, and limited resources. The barriers to water reuse adoption in Africa, encompassing socioeconomic, institutional, and technological factors, underscore the need for targeted strategies. The paper recommends policy reforms, financial support, community engagement, technology transfer, research initiatives, and international collaboration to overcome these barriers. By recognizing the disparities and shared complexities, this research aims to contribute to developing context-specific solutions, fostering sustainable water reuse practices in Africa, and promoting equitable and resilient water management strategies globally.
Article
Full-text available
Today, the ideas of right to water and commodification of water are hot topics of debate in international, national and regional level, because, water scarcity is a global threat and therefore it demands an economically and institutionally sound system for its utilization. In the view of neo liberal policy reforms in India since 1990s, it is only possible through the commodification and marketing of water. It is in this context that beneficiaries have to pay water in the commodified water supply projects in India. Due to the cost recovery measures and conditionalities in such paid water supply schemes funded by the International Financial institutions and other international corporations, the poor and marginalised sections of society gradually removed from the adequate and safe access to water. Such cost recovery measures became the major threat on right to free and safe water especially in the context of the right based approach to water in India. Therefore this paper analysing the impact of commodification of water and paid water supply projects on the right to free water of people, especially with regard to the weaker sections in Kerala. KEY TERMS: Right to water, Commodification of water, Paid water supply system, Cost recovery model.
Article
Full-text available
In many countries, catchment restoration is underfunded. This study aims to address whether household water pricing could be used as a mechanism for securing funds for catchment restoration. The objectives were to determine households' willingness to pay (WTP) for their existing water use, investigate whether institutional trust and municipal satisfaction influenced WTP, and establish whether aggregate consumer surplus at the municipal scale could cover the costs needed to finance catchment restoration. Surveys were conducted on 502 households in three metropolitan municipalities in South Africa. Contingent valuation revealed that average WTP for water was between 12 and 137% more and 32 and 73% more than what households currently pay for water per month in Cape Town and eThekwini, respectively. Satisfaction with municipal service delivery positively influenced WTP, while institutional trust did not. In Cape Town, based on the aggregate WTP from the higher income categories, consumer surplus was 779 million South African Rand (ZAR)/year, more than double the estimated cost required to restore the catchment areas supplying water to the city over 30 years. In eThekwini, consumer surplus was equal to the amount needed over 30 years (250 million ZAR/year). These results demonstrate the significant potential to raise water tariffs for higher income households in metropolitan municipalities.
Article
Full-text available
Water reuse is rapidly becoming an integral feature of resilient water systems, where municipal wastewater undergoes advanced treatment, typically involving a sequence of ultrafiltration (UF), reverse osmosis (RO), and an advanced oxidation process (AOP). When RO is used, a concentrated waste stream is produced that is elevated in not only total dissolved solids but also metals, nutrients, and micropollutants that have passed through conventional wastewater treatment. Management of this RO concentrate—dubbed municipal wastewater reuse concentrate (MWRC)—will be critical to address, especially as water reuse practices become more widespread. Building on existing brine management practices, this review explores MWRC management options by identifying infrastructural needs and opportunities for multi-beneficial disposal. To safeguard environmental systems from the potential hazards of MWRC, disposal, monitoring, and regulatory techniques are discussed to promote the safety and affordability of implementing MWRC management. Furthermore, opportunities for resource recovery and valorization are differentiated, while economic techniques to revamp cost-benefit analysis for MWRC management are examined. The goal of this critical review is to create a common foundation for researchers, practitioners, and regulators by providing an interdisciplinary set of tools and frameworks to address the impending challenges and emerging opportunities of MWRC management.
Preprint
Full-text available
The global water cycle has experienced significant changes due to the interplay of climate shifts and human activities, resulting in more frequent and severe droughts and floods. While municipal bonds serve as the primary financing method for public water agencies, the understanding of the impact of climate risks on the bond market remains limited. Analyzing a decade of water bond data (2009-2019), this study offers empirical evidence on the impact of flood and drought risks on municipal bond spreads, which serve as indicators of the additional yield bond investors demand to offset risks and, consequently, the financing costs for water agencies and municipalities. The results reveal that bond markets began factoring in flood risks in 2013, whereas drought risks exhibited a different trend before that year, closely tracking with the actual damage caused by flood and drought hazards. Using a structural credit risk model, we show the moderating effects of water sales and investor perceptions of climate change on climate risk pricing in the bond market. These findings have far-reaching implications for climate risk management and the sustainable stewardship of our water resources, as regions with heightened climate risk exposure are perceived as riskier by market participants, leading to a higher cost of capital.
Article
Full-text available
Water one of the main sources for human survival and growth. The Government of India has recognized the importance of proper utilization of this very special solution and has mentioned the special challenges faced with its management. Through this research we have attempted to understand and evaluate the main causes of lack of proper water management in urban cities by using available literature as well involving the officials of local bodies involved in its management. In this research we collected opinions through an open-ended questionnaire from the people mostly involved in its management. The respondents were of the favor of setting up of boards and accountable bodies for proper management of resources.
Article
Full-text available
Water pricing is one of the most important economic tools for increasing water demand management in the agricultural sector. In this regard, the purpose of this study, was to determine the economic value of agricultural water from the perspective of demand by using production function approach in wheat for Gorgan County, in 2012-13. In this study, flexible and inflexible functions were used. After estimating these functions, Cobb-Douglas function was chosen as the best production function. Water economic value calculated for wheat crop was 1564.5 Rials per cubic meter. Also, the price elasticity of demand for these products was calculated. According to the results, the absolute price elasticity of water demand for wheat was estimated at 1.28, which is larger than unity and shows that price policies can be an important factor in the control of non-optimized consumption of this valuable input.
Article
Full-text available
Charging for the use of freshwater raises the debate about the financial sustainability of water suppliers and the problems of social and operational efficiency in the sector. The price of raw water, which aims to avoid wasteful uses and give an idea of the value of water, introduces a new cost element to be managed by users. Given the increased operating costs arising from the implementation of raw water charging, this paper analyzes alternatives for water suppliers. We compare a \(\#1\) cost absorption scenario with the possibility of passing on to final consumers in the first block tariff, defined by volume (\(\#\)2a), and the second block tariff charged by additional \(m^3\) consumed (\(\#\)2b). The results show that scenario \(\#\)1 reduces the availability of resources for investments, compromising the maintenance of the infrastructure and the expansion of services. Alternatively, as a natural monopoly industry, consumer pass-through is more likely. Both scenarios \(\#\)2a and \(\#\)2b nullify the incentive for rational use and operational efficiency, add risks to environmental sustainability and compromise the plans of the basin committee. However, in scenario \(\#\)2b, the possibility of lower water consumption by households, changing to the tariff of the first block, brings back the possibilities of scenario \(\#\)1. Scenario \(\#\)2a, as a plausible choice, requires an accurate discussion of the social, institutional, and environmental aspects of water governance without losing attention to local particularities. To exemplify the discussion, we tested these scenarios in a Brazilian semi-arid watershed where the freshwater charging is not yet in force.
Book
Full-text available
The book is an introduction to natural resources and environmental economics. It is a reference for students, academics, and professionals.
Article
Disruption of the supply of treated clean water is a phenomenon that occurs all over the world. The increase in population, the growth of urbanization, the opening of agricultural areas and the current economic needs cause the demand for clean water supply to increase but the resources that can be supplied are limited. In addition, other side factors such as natural disasters, raw water resources, technical aspects, human weaknesses and political elements also make the management of clean water supply treated to consumers unmanageable and effective. Hence, the study aims to justify political intervention in water supply management in the state of Kedah with a focus on politicking in Syarikat Air Darul Aman (SADA). Four methods are used to obtain appropriate data and information involving library studies, document analysis, face-to-face interviews with SADA senior management and politicians in Kedah using semi-structural questions and participating in the nature of the researchers who have held the position of CEO of SADA. The results of the analysis showed that; naturally as a result of SADA's organizational structure, close ties between politicians and top management, abuse of power by the CEO, poor company delivery system, public perception of society causing influence and political interference in organizations such as SADA are seen to occur. At the end of the study, a conceptual and model framework to enable SADA to become a professional and consumer service-oriented corporate entity by marginalizing political influence was developed for future reference and implementation purposes.
Article
Arsenic catastrophe of groundwater is a serious concern in the developing world. Over the last decade, significant progress has been made in arsenic remediation in India, where millions of households are exposed to arsenic poisoning via drinking water drawn from contaminated aquifers. Arsenic Treatment Units (ATUs) have been effective in helping regions where piped–water–supply of surface water is unachievable due to logistic constraints. But no policy measure exists on environmental and economic management of the voluminous wastewater produced by the ATUs. The waste is highly toxic in terms of its arsenic content and leachability, and therefore can readily re–contaminate local environments if suitable stabilisation methods are not implemented. This article presents an investigation of the recent developments in arsenic wastewater management practices of a severely affected state called West Bengal. Commercial fixation of the waste via incorporation into building materials is often seen as a potent method for ultimate encapsulation of arsenic toxicity. By analyzing the practical efficacy of such a prospective project, the author has made an attempt to model scenarios involving non–hazardous and financially beneficial arsenic waste management for sustainable arsenic mitigation in the region.
Article
Full-text available
"The potential role of economic tools in providing socially acceptable public decisions is not widely appreciated, particularly in many highly regulated situations. Furthermore, this paper suggests, contrary to the public perception, that with the improvement of the use of economic tools, the role for government regulation in managing water as an economic good is increased, not decreased. The paper is divided into three sections following this introduction: Section I presents the general principles and methodologies for estimating costs and values in the water sector. In section II, some illustrative estimates of costs and values in urban, industrial, and agricultural sectors are presented based on available data. Section III provides a summary of results and conclusions."
Article
This paper assesses the financing challenges which have to be met by developing countries if water resources are to be managed efficiently, if the quality of the aquatic environment is to be improved and if water related services are to be delivered in a responsive, efficient and equitable way. This paper takes the view that attaching ‘price tags’ to water supply and sanitation, as was tentatively done in Agenda 21, is a misguided approach and that what is needed is articulation of clear principles which should underpin the financing of water supply and sanitation investments. To illustrate the approach the paper focuses heavily on experiences from World Bank water supply, sanitation and urban development projects over the past 30 years. The challenge is to develop appropriate institutional and financial arrangements. The essence of such arrangements is that they ensure that societies mobilize appropriate levels of resources for providing water related environmental services and that these resources are used in the most efficient and effective way possible.
Article
The rapid growth, urbanization and migration in Metro Manila has increased water demand which has outpaced the capacity of the water agency, The Metropolitan Waterworks and Sewerage System (MWSS), to expand supply. Unserved sectors have resorted to well construction while others have resorted to tapping illegal connections to MWSS pipes. Considering that only 65% of the population in the study area is served by the MWSS, and groundwater accounts for only 3% of the MWSS water supply sources, there is a need to focus attention on the private extraction and utilization of groundwater resources in Metro Manila. Average annual groundwater withdrawal for the period 1982-1990 was estimated to be about 235.01 million cubic meters (MCM) while the average annual recharge for the same period was only 206.16 MCM (IDRC-UP-NHRC, 1993). Thus, the rate of mining during this period is 28.84 MCM, resulting in the lowering of the water table by 2.5 meters annually. For the period 1990-96, groundwater level declined at an estimated rate of 6-12m per year. Groundwater resources are, therefore, being threatened by salt water intrusion, contamination, and eventual depletion. This implies that current extraction and utilization of a unit of those resources involve an opportunity cost which is the value that can be gained in the future. Economists would define over-exploitation as any pumping rate in excess of that which yields the maximum present value of net benefits (Young, 1991). This approach would call for the utilization of groundwater stocks if demand so requires, but scale back extraction rates as the aquifer becomes depleted and the "full costs" become higher. The main coverage of the study is the National Capital Region or Metro Manila which consists of eight cities and nine municipalities. The jurisdiction of MWSS includes the National Capital Region (NCR), Rizal province, and parts of Cavite province in Region IV. Its land area is about 2,125-sq. km., with a populatio
Article
Renewable resources are being used in non-sustainable ways in many countries in the world. The costs of non-sustainability need to be enumerated and valued in order to establish the desirability or otherwise of such development paths. The appropriate concept is marginal opportunity cost (MOC), a measure of the social costs of resource depletion. This concept is set in the context of models of the development process which stress the relationship between environment and development as a “coevolutionary” one rather than one of trading off material gain against environmental quality. Measures of MOC need to reflect the often intricate physical and ecological interlinkages within ecosystems, allowing for, e.g., the relationship between deforestation, soil erosion, streamflow and sedimentation. In turn, MOC comprises direct costs of resource use, the externalities arising from ecological interlinkage, and a user cost component which arises because of non-sustainable resource use. Formulated in this way, MOC has implications for shadow pricing exercises, national accounting, and for the choice of sector and geographical area for project appraisal.
Water utilities data book: Asian and Pacific region. Asian Development Bank Second water utilities data book: Asian and Pacific region
  • Asian Development
Asian Development Bank. (1993). Water utilities data book: Asian and Pacific region. Asian Development Bank. (1997). Second water utilities data book: Asian and Pacific region.
Water as a social and economic good: How to put the principle into practice. Global Water Partnership/Swedish International Development Cooperation Agency
  • P Rogers
  • R Bhatia
  • A Huber
Rogers, P., Bhatia, R., & Huber, A. (1998). Water as a social and economic good: How to put the principle into practice. Global Water Partnership/Swedish International Development Cooperation Agency, Stockholm, Sweden. UNCED. (1992). A guide to Agenda 21: A global partnership. Geneva: UNCED.
Can the removal of economic subsidies be beneficial to the environment? 1–1996 Feem News Letter. Extract from the speech on the Contributions of Economic Instruments in Environmental Policy of OECD Countries Dilemmas in water and wastewater pricing: Case study of Bangkok
  • M Potier
Potier, M. (1996). Can the removal of economic subsidies be beneficial to the environment? 1–1996 Feem News Letter. Extract from the speech on the Contributions of Economic Instruments in Environmental Policy of OECD Countries, Manila, 6–8 February, 1996. Potter, J. (1994). Dilemmas in water and wastewater pricing: Case study of Bangkok, Thailand. Masters thesis submitted to the Department of Urban Studies and Planning, MIT.
Paying for Urban Services
  • D Whittington
  • Donald Lauria
Whittington, D., Donald Lauria, & Xinming Mu (1989). Paying for Urban Services, World Bank Case Study, Report 1NU 40, Washington, DC, World Bank.
Promoting conservation with Irvine Ranch Water District's ascending block rate structure
  • A K Wong
Wong, A. K. (1999). Promoting conservation with Irvine Ranch Water District's ascending block rate structure. In Sustainable Uses of Water: California Success Stories, Pacific Institute for Studies in Development, Environment, and Security, Preservation Park, Oakland, CA. World Water Commission. (2000). A water secure world. UK: Thanet Press.
Possible adverse effects of IBT in developing countries. Paper Presented at the World Bank Seminar on Pricing of Sanitation and Water Services
  • D Whittington
Whittington, D. (1997). Possible adverse effects of IBT in developing countries. Paper Presented at the World Bank Seminar on Pricing of Sanitation and Water Services, February 18-19, 1997.
Dilemmas in water and wastewater pricing: Case study of Bangkok, Thailand. Masters thesis submitted to the Department of Urban Studies and Planning
  • J Potter
Potter, J. (1994). Dilemmas in water and wastewater pricing: Case study of Bangkok, Thailand. Masters thesis submitted to the Department of Urban Studies and Planning, MIT.
Developer selected for 25 MGD Florida West Cost seawater desalting plant. The International Desalination Water Reuse Quarterly, 9/1, 1999
  • G F Leitner
Leitner, G. F. (1999). Developer selected for 25 MGD Florida West Cost seawater desalting plant. The International Desalination Water Reuse Quarterly, 9/1, 1999. OECD. (1987). Pricing of water services.
Water utilities data book: Asian and Pacific region
  • Asian Development Bank
Asian Development Bank. (1993). Water utilities data book: Asian and Pacific region.
The political economy of increasing block tariffs in developing countries. Paper Presented at the World Bank Sponsored Workshop on Political Economy of Water Pricing Implementation
  • J J Boland
  • D Whittington
Boland, J. J., & Whittington, D. (1998). The political economy of increasing block tariffs in developing countries. Paper Presented at the World Bank Sponsored Workshop on Political Economy of Water Pricing Implementation, Washington, DC, November 3-5, 1998.
Can the removal of economic subsidies be beneficial to the environment? 1-1996 Feem News Letter. Extract from the speech on the Contributions of Economic Instruments in Environmental Policy of OECD Countries
  • M Potier
Potier, M. (1996). Can the removal of economic subsidies be beneficial to the environment? 1-1996 Feem News Letter. Extract from the speech on the Contributions of Economic Instruments in Environmental Policy of OECD Countries, Manila, 6-8 February, 1996.
Improving the environment through reducing subsidies. Part I. Summary and policy conclusions Industrial water pricing
OECD. (1998). Improving the environment through reducing subsidies. Part I. Summary and policy conclusions, Paris. OECD. (1999a). Industrial water pricing.
Second water utilities data book: Asian and Pacific region
  • Development Asian
  • Bank
Asian Development Bank. (1997). Second water utilities data book: Asian and Pacific region.
Pricing urban water: Principles and compromises. Paper presented at the World Bank seminar on Pricing of Sanitation and Water Services
  • J J Boland
Boland, J. J. (1997). Pricing urban water: Principles and compromises. Paper presented at the World Bank seminar on Pricing of Sanitation and Water Services, February 18-19, 1997.
Water pricing: An overview. Paper Presented at the World Bank Seminar on Pricing of Sanitation and Water Services
  • C W Howe
Howe, C. W. (1997). Water pricing: An overview. Paper Presented at the World Bank Seminar on Pricing of Sanitation and Water Services, February 18-19, 1997.
Recent developments in the pricing of water services in OECD countries. Paper Presented at the World Bank Sponsored Workshop on Political Economy of Water Pricing Implementation
  • T Jones
Jones, T. (1998). Recent developments in the pricing of water services in OECD countries. Paper Presented at the World Bank Sponsored Workshop on Political Economy of Water Pricing Implementation, Washington, DC, November 3-5, 1998.
Improving the environment through reducing subsidies. Part I. Summary and policy conclusions
  • Oecd
OECD. (1989). Water resources management: Integrated policies. OECD, Paris. OECD. (1998). Improving the environment through reducing subsidies. Part I. Summary and policy conclusions, Paris. OECD. (1999a). Industrial water pricing. OECD. (1999b). Pricing of water services: An update. OECD. (1999c). Household water pricing in OECD countries. OECD. (1999d). Agricultural water pricing.
Masters thesis submitted to the Department of Urban Studies and Planning
  • J Potter
Potter, J. (1994). Dilemmas in water and wastewater pricing: Case study of Bangkok, Thailand. Masters thesis submitted to the Department of Urban Studies and Planning, MIT.