Nieuws - 3 november 2011

A price on water

Joris Tielens

Global demand for food and energy is rising fast, and with it the demand for water. At the same time, water is becoming scarcer as a result of climate change.

This is forcing us to look for new ways of distributing water, says Wageningen economist David Zetland in his newly published book The End of Abundance. The aim of his book, written for non-academics, is to bring more economics-based thinking to the debate on water management.
Leaving the distribution of water to government bodies worked fine in a period of abundance, says Zetland. But that time is past. ‘We need radically new ways of managing water, with less government and more market.' In a nutshell, the economist wants to establish a water market on which farmers can trade in this valuable resource. In developing countries, citizens should be given ownership rights to some of the water resources of the country, in the form of water shares. The remaining water rights could be leased to anyone who can afford them, to fill a swimming pool or to irrigate a field.
Inefficient or corrupt
The idea of a water trade is controversial because drinking water is a basic human need. In Europe we are used to having cheap water on tap as a public service. But that does not go without saying for the rest of the world, says Zetland. ‘The government services responsible for the water supply are often inefficient or corrupt. Especially in developing countries, but in the US as well.' This is why Zetland is convinced that government regulation does not work. Economic instruments such as a higher price on water would help, he says. A higher bill also provides a stimulus to use less water. Zetland makes just one exception. Where water is needed for nature management, this can be in everyone's interests and the water required should not be private property or sold on the market.
'Some for free, pay for more'
To make sure that people do not die of thirst, Zetland proposes a system he calls, 'some for free, pay for more'. The first hundred litres per person per day should be free. And to prevent Daddy from selling the water to pay for beer, some of the water should be non-tradable. Anyone who wants more than a hundred litres a day should have to pay a stiff price for it.
By leasing their surplus water rights, the poor could supplement their incomes and thereby increase their food security. ‘The nice thing about it is that the poor no longer need our charity if they can sell their water.'
Is Zetland not afraid that multinationals will buy up even more land and water in developing countries? ‘Land-grabbing is a scandal. How is it different to colonialism?' Zetland asks rhetorically. But he believes the problem lies with African governments, and that the solution is not more government, but less.
For the book, go to