Water, Water, Everywhere

Is water a different kind of commodity than oil, rice, wood, or anything else you could buy? Fresh water is actually an extremely abundant commodity and luckily I don’t have to pay much for it. I get it piped to my house and I only pay $2.35 for 1000 gallons. (I pay about $3 for 1000 gallons for sewage).

That’s cheap by anyone’s standards.

I wonder if the government subsidizes that cost. I don’t know why they would. It’s not like there are a lot of poor people who live in Fairfax County that could not afford to pay $5 or $10 for 1000 gallons.

The argument that water is a special commodity that needs to be given away free is nonsense; it may be cheap but it isn’t free. Any commodity given away free is going to be terribly wasted. I had a leaky toilet that needed to be repaired. I didn’t really want to do it, but I knew it would waste water and I was paying for it, so I fixed it. If I were paying more for water, I would have done it sooner.

Water might be more expensive in India than in the U.S. because there are more people and less water available per person. However, I doubt that an efficient market in water would produce a price much more than double of triple my price, after all, Indian labor is so much cheaper than here. Even at $10 per 1000 gallons, water is cheap: that works out to be about 100 rupees per cubic meter. I would be curious to know what residents in India actually pay for water.

Two recent posts got me thinking about water:
1. The post by Sunil Laxman on how an NGO trying to help a village get running water might cause unexpected problems,
2. The post by Dilip D’Souza on the politics of the water associated with a new dam in Gujarat.
In each case, I think the fundamental problem was that the water was not sold but just given away.

In Sunil Laxman’s story, an NGO tries to help a village by piping water into each home. But some homes get the water before other homes and this causes communal strife. Also, once water is piped into people’s homes, the temptation to waste water is huge. Before, people had to physically go to the common well and draw water and carry it to their homes. This labor put a price on water (a very high one, in fact) and the water was not wasted.

One solution is to create a corporation that will lay pipes to people’s homes and charge a fee for water usage. The water would be metered just like at my house. This corporation could not charge too much for water or else people would simply revert to going to the well and carrying it back to their homes. But there may be profits (if not, than it isn’t worthwhile to pipe water into people’s homes in Indian villages, an unlikely possibility but a possibility). If there are profits then firms would bid for the opportunity to be the water company and this money could be a nice windfall for the village.

The point is, if it is profitable to pipe water to people’s homes, everyone will get their water at the same time, and there will be no reason for communal strife.

In Dilip’s story, the water was going to the haves at the expense of the have-nots. Ironically, this is because it is free. In a world where you pay for water, everybody’s money is the same color. Of course, a decision to build a pipeline from point A to point B will necessarily be political, especially if that pipeline crosses political boundaries. But, in the end, everyone will get their water if they have the money to pay for it, and water is never a very expensive commodity, even in India. There won’t be any reason to shortchange the have-nots if you are selling the water, because they could buy it like anyone else. But if someone tells them they should get it for free, they may wait.

Waiting for water…what could be a bigger waste?