09 February 2008

Ethics and water charging

Water pricing often makes people worry about poor people. A recent study on Punjabi farmers described the environmental problems associated with farmers' wasteful use of water. Charging the farmers just 25% of the price that city people had to pay would be enough to motivate the farmers to be much more careful. This would have only a modest effect on their incomes, but would have much better environmental outcomes.

Why the farmers should pay 75% less than the poor city people is beyond me.

This whole issue of "social acceptability" for water pricing makes no sense. Water should be priced like everything else - by supply and demand. It most certainly should not be free, just as oil, plastic, and herbicides shouldn't be free. Its use has too big of an effect on everyone else.

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