Raising Consumer Water Rates No Panacea to Solving Water Woes

Can the growing demand for water in the U.S. from households, businesses and agriculture be effectively managed merely by charging consumers more for household water use? A new report released today by the consumer advocacy group Food & Water Watch finds that raising household water rates alone is not the best way to conserve and protect essential water resources.

Priceless: The Myth of Water Pricing Reform challenges so-called market-based solutions to the emerging water crisis and finds that raising residential water rates will not yield significant water savings in part because consumers account for only 8 percent of all U.S. water consumption. Moreover, because most residential water consumption goes towards essential uses like drinking, cooking and sanitation, consumer demand for water is unlikely to change regardless of price.

"There is very little evidence that water pricing actually works," said Food & Water Watch Executive Director Wenonah Hauter. "In addition to ignoring and undervaluing the significant impact of industrial users on U.S. water resources, water pricing overlooks the basic fact that water is not a widget. It's an essential natural resource whose use among consumers is mainly inelastic. If the past couple of years of economic turbulence in the U.S. have taught us anything, it's that social goods should not be made vulnerable to the whims of the market."

The report also suggests that water pricing is most likely to negatively affect low-income consumers. Raising water prices could mean that some households are denied access.

With 52 percent of all U.S. water used for industrial purposes, the report recommends that water conservation start with these users, who often pay less for water than residential consumers.

It further suggests that water conservation be addressed as part of an integrated approach to managing water demand that can be tailored to local conditions. With U.S. water infrastructure losing 1.2 trillion gallons of water a year due to aging pipes, this could include infrastructure repairs, as well as educating the public on water conservation, offering consumers incentives to upgrade their appliances to water-efficient ones and implementing drought-tolerant landscaping, among other strategies.

"No single strategy will be sufficient in addressing our growing water needs. What we need is an equitable approach that takes into account both industrial and consumer demand, while harnessing the benefits of a range of conservation tools. Focusing only on water pricing to meet water demand is unfair to consumers and ultimately ineffective," said Hauter.

Priceless: The Myth of Water Pricing Reform is available here.