One solution: raise the price of water

Posted on January 27th, 2009 by Water Nymph in Phil Says


The World Bank has released an overview of China’s water scarcity situation which includes some solutions—one of which is raising the price of water.

While water allocation is a big problem in China, the report states that “The economic costs of disease and premature deaths associated with the excessive incidence of diarrhea and cancer [the result of drinking polluted water]… has been estimated at… 0.49 percent of GDP.” 

If you add to that water scarcity and other pollution, the cost of the water crisis comes in closer to 2.3 of GDP. And that doesn’t take into account the cost of impacts for which estimates are unavailable.

It’s a fascinating report (you can read it here) and it makes one draw parallels to other countries, specifically our own, with its growing water shortages. China’s water problems are much worse than those in most of the US, however we, too, do not charge for the full cost of water, and so keep water costs artificially low. If we do not start raising prices, we could see similar problems arise.

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