Basic Water Supply & Demand: As Water Reserves are Dwindling, Water Prices SHOULD be Rising (Aguanomics)

Mar.07, 2009 in Water Industry, Water Management, Water Rates

(March 5, 2009, Aguanomics)

…Says Harvard Professor Stavins at the Huffington Post. His op/ed continues:

Throughout the United States, water is under-priced. Efficient use of water will take place only when the price reflects the actual additional cost of making that water available. Lest one fear that higher water rates would mean that Americans would go thirsty, take note: On average, each of us uses 183 gallons of water a day for drinking, cooking, washing, flushing, cleaning, and watering, but less than 5% of that is for drinking and cooking combined. There is plenty of margin for change if people are given the right price signals.

Fifty years of economic analyses have demonstrated that water demand is responsive to price changes, both in the short term, as individuals and firms respond by making do with less, and in the long term, as they adopt more efficient devices in the home and workplace.He goes on to give his version of my “some water for free, pay for more…”

Note: The story was picked up by DWR’s clippers, which is funny, because they told ME that my forbes.com piece was too op/ed for them. Was it the message or the messenger? Perhaps the message, since I advocated higher water prices LAST July… OTOH, I am not a Harvard professor. So much for “the truth will set you free!”

Bottom Line: Now that we are all on the same page, can we get some conservation pricing? Everyone gets some cheap water but then pays a LOT if they want more.

(Original Post Here)