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However, economic history reveals that the first spending category governments cut in a crisis is maintenance (Universities too). There is a very simple and equitable solution to this part of the water problem:

Adoption of pricing systems that provide low income households with the minimal water they need at low costs while charging increasingly higher rates on all water consumed above that minimum. This is one good way to get “more equity in the ecosystem.”

Example: Worldwide average- people across the world drink under 2 quarts of water per day. Medical authorities consider 2 quarts per day to be the minimum standard. Rich countries tend to reach this level. Poor nations typically fall far short of the minimum.

So, where there are water distribution systems with meters then, households would be charged a low base price say for all water used blow say 10 gallons (20 quarts) a day (a family of 5). Then for next 10 gallons the charge would double, for the next 10 gallons the price per unit would be triple the base price, and so on.

In several really poor nations, households without water connections use stand pipes located at intervals within villages and urban areas. Here, it is sensible to provide free all the water they can carry . When one has to carry water by hand for ½ a mile or one of more miles, one tends not to waste it.

Water meters clearly help conserve. For those fortunate enough to have house connections, water meters are an excellent way to enforce water restrictions, especially higher water prices for excessive water use.

The author has often heard, however you can’t enforce conservation with water meters and these can’t work in poor areas; people will smash them. This has not been the experience in most nations, including material water systems in Bogota and Santiago.

Also , the other side of the budget may be used to combat water wastage, if the higher water charges are used to finance.

  1. Maintenance and repair of water systems (end big leaks).
  2. Subsidization of programs for water recycling , basically utilizing wastewater for industry and agriculture (grey water).
  3. Subsidization of water storage kits for households (rain barrels etc.)

An indian example

India since the “License Raj” ended in the 80s India shows signs of becoming something of a hotbed of new, bottom-up , market oriented solutions to both help poor people and improve the environment. In Andhra Pradesh, a foundation is using a pay-per-use model to deliver clean water to a million people. Households buy one 12 liter container of water per day, at cost from water filtration plants. Moreover, they get back what amounts to a rebate, if 500 households get together to buy the containers .

So there are sensible options for water pricing to households. But remember that in developing nations 70% of water is used in agriculture and every where it is heavily under priced.

So a major part of the solution is to raise water tariffs for irrigation sharply.

Worldwide 20% of water is used for industry. The solution here – raise water tariffs on industry and then turn around and use the revenue to subsidize water recycling.

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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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