What price recycled water?

The community sees the ordinary use of water as a right and will not tolerate increased prices to restrict household supplies but will tolerate water restrictions otherwise. In short, people believe they have a right to water at a reasonable price and believe it unfair that rich people have privileged access because of their wealth.

Given these facts it is politically unacceptable to reduce demand for indoor essential household use by increasing prices. This leads to the first principle for any system of pricing.

• Every person is entitled to a reasonable amount of water for indoor essential household use at a fair price.

The second principle is:

• mandatory restrictions on consumption are not an effective long term solution to reduce demand. A public, transparent rewards system will encourage many members of the community to voluntarily reduce consumption.

The community will respond to calls to reduce water consumption but they want recognition they are doing their bit. This can be achieved through water restrictions but in the long term this isn’t a good solution and should only be used in times of crisis. The continual use of restrictions, particularly if it is apparent that other solutions are available, will lead to people not obeying them and will reduce their effectiveness in times of crisis. A system of rewards for consumption reduction will give recognition and would be acceptable to the community.

The question then becomes what form rewards should take and how they are allocated.

The third principle is:

• recycling is necessary for long term sustainability but is rarely economically justified in cost terms when compared to the cost of fresh mains water.

Theoretically a household could be self sufficient in household water consumption through recycling and roof collection. Also the recycling of water from household consumption could meet much of the demand for outdoor water. The problem with recycling is that it costs money to build recycling systems and there is rarely any economic justification when compared to the cost of water from mains supply. However, for long term sustainability it is necessary to invest in recycling systems at an individual level but more importantly at a community level.

In marketing products other than water, rewards work better than discounts in changing consumer behaviour. The phenomena of four cents a litre off petrol is the latest example of the power of this approach. Frequent flyer points are another.

It is proposed that a rewards system be introduced as a way of reducing consumption. Each person is given an allocation of water that they can purchase at a “reasonable” price. Water consumed over the allocation is charged at a higher price. It is proposed that people who consume less than their allocated amount be given a “reward” of some form. The critical factor is not the reward but the recognition that the reward brings. The increase in price for water above the allocated amount will serve as a price signal and can fund the reward. This means the total amount collected from water consumption remains the same.