March 29, 2010
Change Prices, Not Attitudes, to Conserve Water
Market Pricing is the Key to Efficient, Sustainable Water Use
A recent analysis of Canadians’ attitudes about water use revealed a large and growing number of Canadians “admit” to “water wasting activities” (as the authors label it). For example, 44 per cent say they leave the tap running when they wash and rinse their dishes, and 19 per cent say they occasionally hose their driveways.
Bob Sandford, a spokesman for the project, was quoted in media reports that use of water in these unnecessary ways should be a “huge concern.” Sandford suggests public education on why water conservation would be helpful. He remarked that until the public is properly educated on such matters, we “won’t achieve anything approaching sustainability.” The researchers also lament that one quarter of Canadians “have no idea” where their water comes from— hinting that public ignorance may be partly to blame for Canadians’ wasteful water usage.
The researchers were well-intentioned, but one of the suggested remedies—public education about the importance of conservation—is an ineffective approach to changing behaviour. For almost all of the products we buy, we think little about how much energy was required to produce them, or where the materials came from. People have time-consuming jobs, families and interests. They can’t be expected to know how the things they consume are produced and delivered. Instead, we simply observe the price and make a rational decision about whether to consume. This is true of pencils, personal computers and, yes, water.
So the simplest and most effective way to promote conservation is to simply increase the price of water.
This would not require levying punitive taxes. Instead, we need only to reverse public policies in Canada that actually encourage high levels ofwater consumption and waste. Water prices in Canada are among the lowest in the industrialized world, largely due to government subsidies. Throughout Canada, government water policies keep prices well below what they would be in an open and full-cost market. So in many cases, consumers actually pay significantly less than the cost of processing and delivering the water they use.
Additionally, many Canadians are still charged a flat rate for the water they use in their homes. This means once a person uses one drop of water, they face no financial incentive to conserve; every subsequent drop is essentially “free.” Although more municipalities are moving away from flat rate pricing, this inefficient model persists in a sizeable minority of communities- particularly in smaller towns. With incentives for overconsumption such as this, no amount of nagging will convince people to significantly curtail water use.
By charging consumers market prices for water and billing them based on the amount used, conservation can be advanced more quickly than if millions of dollars are spent on public education campaigns.
There is solid evidence that market prices for water works to promote conservation. According to a 2004 analysis by Environment Canada, residential water users who pay a flat rate use an average of 74% more water than Canadians charged by the litre.
Some will complain that market level water pricing would be hard on poor people, who might not be able to afford higher prices. But this problem can be easily solved. For example, an “increasing block rate” can be used. This approach charges a low rate for the amount of water necessary for basic needs, and then applies market rates for additional water use. This way no one goes without needed water, but everyone pays market prices for “luxury” water use not needed for their health and welfare.
Even at market prices, some people will choose to buy a swimming pool, high-pressure showerheads and hose their driveways rather than sweep leaves. While the researchers responsible for the water attitudes survey might call that “wasting” the resource, I call it “using” the resource. Canada is a water-rich country, and Canadians need not feel guilty about using water to make their lives more pleasant and convenient – if they’re willing to pay for it. Leaving this renewable resource underutilized due to guilt or social pressure is another form of waste.
If somebody enjoys long showers, they don’t deserve a guilt trip. All of us—except for extreme ascetics—use important resources that we don’t necessarily need but the usage of which contributes to our enjoyment of life. Good. That’s what the resources are for. But each of us should be required to pay the full price for such resources. Million-dollar campaigns to change “attitudes” about water are unnecessary for promoting conservation, only realistic policies about water pricing.
is Assistant Research Director and Senior Policy Analyst at the Frontier Centre for Public Policy. Ben holds a Masters Degree in Public Policy from the University of Toronto’s School of Public Policy and Governance. Since joining Frontier in 2009, Ben has completed major research papers on a wide variety of policy issues. He has authored papers on early childhood education policy, university tuition policy and Canadian fiscal federalism, among other topics. He is the lead researcher for Frontier’s two major inter-jurisdictional comparisons of healthcare system performance. Ben has co-authored a number of policy studies about environmental policy with Dr. Kenneth Green of the American Enterprise Institute. Ben has presented the findings of his research in dozens of radio and television interviews, and his op-ed commentaries have been published in the National Post as well as in major regional newspapers including the Winnipeg Free Press, the Calgary Herald, The Gazette and the Toronto Sun.