Pricing water's true cost

Abstract

[From paper]: Recently, a California panel rejected a proposal for a USD 1.4 billion desalination plant to convert ocean water into drinking water. The developer had hoped the plant would address the state’s megadrought by creating 50 million gallons of drinking water a day. Yet, in this age of climate change leading to multiyear droughts, frequent floods, and wildfires, we can no longer rely simply on building new plants and water storage that negatively impact the environment to climb our way out of the increasing water crises. Clean water is imperative to all life and is essential to the economy. Yet, in the United States, clean water is a resource long taken for granted. Part of the reason that people do not value water is because water is priced so cheaply due to the government subsidizing it. Unfortunately, many places still price municipal water much lower than the true cost to provide it. Not surprisingly, freshwater resources are depleting more rapidly due to increased demand, exacerbated by the environmental stress of climate change. The nation’s water and sewer infrastructures are also rapidly aging and deteriorating, while most water providers have insufficient funds to modernize them. The system by which water is priced in the US should be raised to the full-cost pricing because it would generate essential revenue to adequately maintain or replace critical water and sewer infrastructure, and it would markedly encourage the public to conserve water. By implementing one or more of the rate pricing structures to transition to a full-cost pricing system that better reflects the true cost of water, water providers can better protect and ensure a continuous clean water supply for communities in the face of growing water scarcity.