Water — preserving a precious resource

SK Sarkar/Shresh Tayal | Updated on March 21, 2021

Holy river: There is an enormous religious and social symbolism attached to the Ganga.   -  Reuters

A true valuation of water must include the economic as well as the spiritual and ecological dimensions

On March 22, 2021, the world will be observing the World Water Day on the theme “valuing water”. Initiated in 1993, this Day raises awareness of about 2.2 billion people living without access to safe water in the world.

The broad contour of this year’s theme is what water means to people, understanding its true value, and how we can protect this vital resource in order to tackle the global water crisis. In the context of fulfilling Sustainable Development Goals VI relating to water and sanitation, this theme has become highly relevant for all countries including India.

The existing literature points out that water should be treated as an economic good as stated in the 1992 Dublin Statement. Water has economic value in all its competing uses and should be recognised as an economic good.

The economic and the social

According to Agenda 21 (1992), water should be treated as a finite resource having economic value with significant social and economic implication regarding importance of meeting basic needs. The range of values of water (UNESCO 2006) depends on a case-to-case basis and on the stakeholders’ group.

For example, people in semi arid zone in India value water differently compared to people living in the eastern part of India where water resources are abundant. Water is also a basic human right on the part of its users and therefore human needs should be satisfied.

Water is critical and is a fundamental necessity of life. It is considered as God’s gift to humanity. Apart from meeting the drinking requirement, water provides raw materials for the production of goods and services. The development of an economy depends on the various uses of water.

For example, energy production, manufacturing as well as food production rely heavily on access to water.

However, water is more than a substance or a commodity. It carries multiple values and meaning for different set of stakeholders and in different localities. For families, kids in schools and in offices, water is a symbol of health, hygiene, dignity and productivity.

In religious and spiritual places, water represents a connection with the God. For example, the river Ganga is useful to people for its cleansing purity, and last rites performed near the river are considered auspicious. Water has an important place in various religions. In effect, water has enormous and complex value for our households, food, culture, health, education, economics and the integrity of our natural environment.

Pricing water

But, most societies undervalue and underprice water. The true cost of water does not reflect its true value, which leads to overexploitation of the resource. Take the case of ground water. This water is over extracted compared to its recharge. This often leads to salinity and other contamination. Recently, for its industrial use in critical areas, there is a pricing mechanism, but such pricing is not available for its agricultural use as well as domestic use.

Thus, the environmental degradation of ground water use is often unnoticed. Valuing water means recognising and considering all the benefits provided by water — including economic, social and ecological dimensions. And these should be valued as far as possible.

The water tariff applied by different municipal bodies are actually the costs of water supply to consumers. But these prices are highly subsidised and often do not reflect the externalities like pollution due to wastewater, involved in water use.

Most of the grey water are not treated for reuse and discharged in open environment leading to water contamination. Under valuation of water often leads to excessive abstraction and waste, further increasing the problem of water pollution.

A resource under threat

Today, water is under extreme threat from a growing population, increasing demands of agriculture and industry, and the worsening impacts of climate change. The annual per capita water supply in India is declining. Pressure on water resources generate risks especially for companies and municipal bodies and these have the ability to affect the cost and revenues as well as assets. Hence, it is necessary to make a proper valuation of water.

Total Economic Value (TEV) Framework recommended by United Nations (UN) identifies that total economic value of water must include both the ‘use’ (for example drinking) as well as ‘non-use’ values (for example recreation) of water.

Use values of water should include ‘direct use value’ which is the cost incurred in water production, consumption and sale, and ‘Indirect use value’ which refers to values associated with regulating and supporting services provided by water ecosystem.

In addition there are ‘option values’ which refers to the value of preserving ecosystems for potential future direct or indirect users. The sum of these should be referred to as full economic value of water.

Commodification of water recognises prices, markets, growth, profit, efficiency, cost of production and distribution. Community value of water incorporates its spiritual, aesthetic and environmental dimensions. Both aspects should be taken into account for total valuation of water.

Understanding the value of water is essential as it leads to sustainable use of water, and protection of water resources. An awareness in this regard should be created.

Widening the spectrum of water valuation aims to widen the sensitivity towards conservation of water and improving the water use efficiency in various water sub-sectors. Political commitment for total valuation of water and its implementation is a must.

Sarkar is a Distinguished Fellow in TERI and former Secretary, Ministry of Water Resources. Tayal is a Senior Fellow Water Resources Division, TERI

Published on March 21, 2021

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