Water Pricing
Discussion
Low water prices encourage excessive water consumption.
Australians are using water excessively due to innappropriate pricing. This has diverted water away from natural ecosystems such as wetlands, depleted aquifers, and in some catchment areas subject to drought has emptied reservoirs, requiring water to be trucked in.
Higher water prices favour water value adding
Higher water prices would ration limited water supplies in a way that favored those water uses that added more value to the water. Low-value-adding water uses, that could no longer be justified given the higher price, would drop out.
Higher prices for catchment water favour water recycling.
Where water recycling schemes have to compete with catchcment water - from rivers, lakes, reservoirs and underground aquifers - subsidies for catchment water discourage water recycling, which if implemented widely, would do much to conserve often limited catchment water supplies.
Recommendations
Full Cost Pricing
- The price of water should more accurately reflect costs incurred by the system, including wastewater disposal.
Water consumers are often undercharged for the water they use, which leads to wasteful water use.
Usage versus Access
- The capital and matinenace costs of the water system should passed on to consumers in proportion to water usage, hence charged as a per-unit fee, not charged as an access fee regardless of water usage.
If consumers pay a large, fixed access fee, and minimal ongoing per-unit fees, then water will be used excessively. Meanwhile, many consumers, who would use water minimally but efficiently, may not be able to afford the access fee, which at low consumption rates drives up the cost per unit.
Library
The Value of Water: Inquiry into Australia’s management of urban water. Australian Parliament. 2002.12 - The price of water in Australia often doesn't include environmental costs.
Water: What ’s a Fair Price to Pay? Earthbeat. ABC. 2003.8.23
2007.7.2