Saturday, September 20, 2014

Phony Experts Must Wake Up to Water Pricing

I have the distinct privilege of hearing self-styled sustainability experts claim it is impossible to price water.  These people are all over public forums and business events pushing their nonexistent thought leadership.  They say this stuff with a straight face.  The claim is nonsense.

Water pricing methods are different all over the world and have much to do with the health of local watersheds.  Waterfund's Global Composite Water Cost Index may be the first true attempt to establish a comprehensive global water price.  The OECD Observer has some good background information on how public water services and subsidies affect water availability.

Major commercial water users like Coca-Cola know exactly how much they pay for water inputs at all of their facilities worldwide.  The US Bureau of Reclamation knows exactly how much revenue it can earn by releasing an acre-foot of water through hydroelectric turbines at any of its dams.  It really is that easy to put a dollar figure on water.

Self-serving claims that ignore facts are easily disproved.  Anyone who claims water cannot be priced without some magical intervention needs to study basic economics or they will quickly lose credibility.  They should especially study the efficiency tradeoffs underpinning water trading regimes.  Water is a supply chain component all over the globe.  It has a very visible cost.