Water pricing for sustainability and the poor

David ZetlandSenior water economistWageningen UniversityThe Netherlands

• Covers some or all O & M costs• Do not reflect externalities• Do not usually recover capital costs• Political pressure to keep prices low• Operator desire to minimize

spending

Traditional water pricing...

• Will reflect scarcity and system costs• People decide to use less or more• Rebate excess € per person or meter

Full cost pricing is sustainable

• Social tariffs are hard to target• Failure to provide service (LDCs)• Diversion from poor to rich

Full cost pricing is fair

• Prices that exceed cash costs • Regulation for local conditions• Social income transfers to the poor• Independent of other policies (nexus)One priority: Allow private/public

corporate water companies to serve customers without political interference

Suggestions

Blog: aguanomics.comBook: endofabundance.comData: WaterDataHub.orgContact: dzetland@gmail.com

Thank you!

This research project has received funding from the European Community's Seventh Framework Programme (FP7/2007-2013) / grant agreement #265213 Project EPI-WATER “Evaluating Economic Policy Instrument for Sustainable Water Management in Europe”