World Has Enough Water for All, Experts Say—But Only if People Pay
Aliette Frank
for National Geographic News
May 1, 2001
As water resources grow scarce, threatening the way of life for people around the world,
a number of scientists argue that to encourage conservation, people need to recognize the true
economic costs of water use.
Among the problems highlighted on Earth Day last month were growing water shortages and the
decline of water quality around the world. Reports indicate that rising global consumption rates,
poor water management, and increased global temperatures could leave two of every three
people in the world affected by water shortages a generation from now.
"By the year 2025, with world population projected to be at 8 billion, 48 countries containing 3
billion people could face chronic water shortages," the World Resources Institute concluded in its
recently published Pilot Analysis of Global Ecosystems report.
Some scientists say that whether the world sinks or swims will depend on whether people
develop an awareness of the true economic costs of using water. "Water is not a resource that is
immune to the laws of economic thinking. As with anything cheap, people will waste it," said John
Briscoe, senior water advisor for the World Bank.
Most water management systems reflect only the costs of collection and distribution. But water
also provides society with many environmental services whose economic costs and benefits are
hidden. Among those services cited by Jaime Echeverria, an economist at the Washington, D.C.–
based World Resources Institute, are wetland and forest protection, crop losses from water
shortages, the effects of land use on water flows, and the maintenance of watersheds.
A Drink Too Cheap
Scientists from the World Resources Institute and other organizations, including the International
Water Management Institute, the Global Water Council, the European Environment Agency, and
the International Food Policy and Resource Institute, have been studying the economic valuation
of water and other environmental resources.
Their goal is to find ways of calculating the true economic value of water and other resources so
this can be factored into social costs at the community, national, and international levels. Doing
so, the reasoning goes, should encourage greater water conservation.
The European Environment Agency found, for example, that 75 percent of the water that some
households in Albania pay for is wasted because of leakages in the distribution system from the
water source to homes.
"When people recognize the true economic value of water, there is an incentive to invest in
products and technology that support efficient water use," said Echeverria. This is illustrated by
examples at the state level in California and at the country level in Chile.
According to Briscoe, an average farmer in California during the 1993 droughts paid about U.S.
10 cents a ton for water needed for agricultural irrigation, as compared with 3 cents a ton today.
As a result, many farmers in California shifted from growing water-intensive crops to more
efficient crops, such as alfalfa and grains.
Similarly, a report by the International Food Policy Resource Institute found that after price
reforms were implemented in Chile, the average amount of water people used for irrigation
decreased by nearly 26 percent.
Greater efficiency of water use for agriculture alone could have large implications for
future water consumption. According to the United Nations Food and Agriculture Organization,
more than 8 billion people will inhabit the earth by the year 2030, requiring 60 percent more food
than today.
The Economics of Water
Incorporating the full economic costs of water into social services requires more effective pricing
mechanisms and clearer policies on water rights and access, among other things.
In some cases pricing mechanisms are misguided. In Costa Rica for example, farmers pay for
water based not on the amount they actually use but on the number of acres they water. "The
farmers have no incentive to invest in efficient water use," Echeverria noted.
Conflicts over cross-boundary water sources are increasingly a problem, especially in the arid
Middle East.
Despite these challenges, "There are successful examples out there of how increasing people's
awareness of the economic value of water to encourage conservation can be done, and that it
does work," said Carmen Revenga, a co-author of the World Resources report.
One notable success story is the Working for Water program in South Africa. The country has
shifted from a flat rate for water fees to a system in which people who save water pay less. A
"block-terrace" pricing system gives poor people greater access to water at a lower cost, while
high-end users pay more.
"We need to think 'economy,'" said Echeverria. "There can be enough for everyone if we give
water, the source of life, the value it deserves."