Thursday, 12 April 2012

The Politics of Water Conservation

By Don Pearson, General Manager, Conservation Ontario

I was struck this week by the realization that we public servants have done a lousy job in educating the public about the reasons that certain policy initiatives might actually be in the public’s interest.  In my hometown of London, Ontario the media have reported over the past few weeks of staff proposals to increase water rates to compensate for the drop in revenues resulting from reduced consumption.  In other words, the public are conserving water, as they ought to do, and by way of appreciation, they are being asked to pay a higher rate for water!   The response is predictable.

The reasons for this perverse outcome have to do with the capital cost of the water infrastructure, which is a fixed cost; the operating or “variable” cost (staff, energy to run pumps, etc.); and the fact that there is no charge for the water itself.  Thus, conserving water may lead to a reduction in some of the variable costs, like energy required to pump a certain volume of water, but not necessarily in the cost of staffing (plants still have to run 24/7) and certainly not in the cost of the capital (the water treatment plants and the distribution system of pipes, valves, etc.)  So, the consumer is rewarded for good behaviour with higher rates.  Hmm, something seems to be wrong with this picture! 

Is the issue that too much capital was invested in the first place, creating a higher fixed cost for water supply and treatment?  That is part of the answer; we design and build our capacity based on our projections of demand.  In other words, if we expect a water treatment or pollution control plant to have a life of 20, or 30 or even 50 years, how many people will it eventually need to serve, and how many litres per day does each person require?  So we overbuild today to have capacity for the future.  The problem is that our historical consumption is not necessarily an appropriate figure to plan on, especially if we are reducing our wasteful consumption.

 Another part of the equation is that the water rates do not include an amount for the product itself – the water!   We expect water to be free; after all, it just falls from the sky!  If we are using water like the precious commodity it is (no water, no life on earth), we should be a lot more careful with it.  Low flush toilets are a good start, but maybe we should be using grey water for some purposes, and saving the drinking water for drinking, rather than bathing, flushing toilets, washing cars, or watering lawns.  We need to rewrite our building codes to enable some of these innovative systems, which are not so novel in jurisdictions already water stressed, and would make good economic sense in Ontario if we priced potable (drinking) water appropriately, something much closer to its true value.  Many of us seem to have no problem shelling out a dollar for a 500 ml bottle, which works out to $2,000 a cubic metre, an amount the municipality delivers to our tap for less than 2 dollars!

We are fortunate in Ontario to be surrounded by 20% of the world’s supply of fresh water – and yet, many of us take this for granted.  Largely for this reason, we waste a lot of water – and we have built (and must pay for) the infrastructure to enable this gross waste.  And as we continue the transition from profligate consumers to educated citizens, and become less wasteful, we need to ensure that our pricing structure doesn’t require our elected leaders to reward good behaviour with penalties.  That type of public policy is just not sustainable!

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