Charging appropriately for water

Water resources have often been undervalued. Water is seen as a 'free' good provided by governments and is subsidized by governments through general taxation. This can lead to a false sense of security with respect to the value and availability of water. Furthermore water subsidies often increase with increasing consumption, providing little incentive for individuals or corporations to be 'water-wise' and work to conserve and protect this vital resource.

This strategy features in the framework of Agenda 21 as formulated at UNCED (Rio de Janeiro, 1992), now coordinated by the United Nations Commission on Sustainable Development and implemented through national and local authorities. Agenda 21 suggests that actual charging need not necessarily burden all beneficiaries with the consequences of all cost considerations. Charging mechanisms should, however, reflect as far as possible both the true cost of water when used as an economic good and the ability of the community to pay.

Article 5 of the Draft Protocol on Water and Health (1999) to the Convention on the Protection and Use of Transboundary Watercourses and International Lakes (1992), states: (g) Water has social, economic and environmental values and should therefore be managed so as to realize the most acceptable and sustainable combination of those values; (h) Efficient use of water should be promoted through economic instruments and awareness-building.

A prerequisite for the sustainable management of water as a scarce vulnerable resource is the obligation to acknowledge its full cost in all planning and development. Planning considerations should reflect benefits investment, environmental protection and operation costs, as well as the opportunity costs reflecting the most valuable alternative use of water.