The Problem With Pricing Water

Water is nearly free in much of the U.S. But is pricing water at a higher rate necessary to maintain and improve an aging, inefficient water system?
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TRANSCRIPT

Question: What should the price of water be?

Jeffrey Fulgham: You know, the price, that’s a real, that’s a hot topic. Where we stand with the price of water is it needs to be priced relative to the value received from that water. 

Often where water is underpriced or not priced for value, there’s no real incentive to reduce consumption or change behaviors. And so the most important thing, I think, relative to price, is that it has to be priced according to the investments made to get that water to you. You know, people say, water is a human right, and I completely agree. What is not necessarily a human right, or free, is that treatment and transport of the water to get it conveniently to us. So, I think the most important thing is that people realize the value of that water. You know, today our water bill in most parts of the world is much less than our cable bill, much less than our monthly cell phone bill, and yet you could certainly live without those long before you could live without water. So we are encouraging the world to look more wisely at water pricing, and one of the challenges regarding price for it, is agriculture. 70% of the world’s water supply goes to our agriculture markets for irrigation.

So if you think about it today, if we subsidize the price of water for irrigation, and there’s no real desire on a, you know, on a farmer’s part to spend a lot of money for low-flow irrigation or smarter irrigation technologies, because it really is a cost to them. Instead, if we would think of those subsidies for low-flow irrigation, for smart technologies, you know, net/net, the farmer doesn’t pay any more, but we, as a society, have much more water available then for our own consumption.