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The Price of Water

The Price of Water

Stephen Merrett

(2007)

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Abstract

The Second Edition of the Price of Water expands on the coverage of the first edition and ambitiously develops the theme of the proper management of river basins, both with respect to the control of rivers’ water quality and the defence of their quantitative flows from source to sea. Using the hydrosocial balance concept of the first edition, and the grand theory of catchment water deficits, a remarkable breakthrough is made in understanding how river flows are destroyed by human society. Drawing on extensive empirical research into the Kafue River Basin and the Thames River Basin, it is shown that the exhaustion of river flows that we see on a world-wide scale can be explained by just five measurable ‘drivers’ to basin surplus and basin deficit. Moreover, by specifying the key drivers and measuring their value, the basis is provided for economic, engineering and land management strategies that will reverse river basin destruction. 
Bringing together 20 papers previously published in refereed journals, The Price of Water provides information that many readers would not otherwise have been able to access to through their professional and academic libraries. The scope of the book is broad, dealing with a diverse range of subjects such as regional and catchment planning and integrated water resources management. Topics considered include: both water quantities and qualities drought management the "virtual water" controversy farmers water-rights the economic demand for water the design of abstraction charges the cost and use of irrigation water the design of effluent charges the "willingness-to-pay" methodology catchment water deficits water resource impacts of new property construction water leakage impact on river basins managing water quality within EC directives.

Table of Contents

Section Title Page Action Price
Contents v
Preface x
1 Introduction: getting to grips with water 1
1.1 Instream and outstream 1
1.2 Reuse and recycling 2
1.3 Catchment and region 2
1.4 Four interpretations of demand 2
1.5 Pricing the resource 3
1.6 Studies of household water use and the willingness-to-pay for water 4
1.7 Tearing up water and floating on water-rights? 5
1.8 Catchment water deficits 5
1.9 The virtual water controversy 7
1.10 Final remarks 8
2 The regional water balance statement: a new tool for water resources planning 9
2.1 Introduction 9
2.2 The rules of the game 10
2.3 The supply categories 13
2.4 Water storage 14
2.5 The use categories 15
2.6 The change statement 16
2.7 The uses of regional statements 18
2.8 Conclusions 19
3 Integrated water resources management and the hydrosocial balance 20
3.1 Introduction 20
3.2 A new implement for the IWRM toolbox 20
3.3 The bridge between quantity and quality 21
3.4 The physical geography and hydrology of Jersey 24
3.5 Water supply in Jersey 24
3.6 Water use in Jersey 27
3.7 Water quality in Jersey 28
3.8 Conclusions 34
4 Sharing the benefits of the river basin’s water economy 37
4.1 Introduction 37
4.2 Benefits of the water economy 37
4.3 Basin water productivity 41
4.4 Sharing the benefits 41
4.5 Conclusions: negotiating the benefits 42
5 Farm-level drought management: an irrigation case-study from the UK 43
5.1 Introduction 43
5.2 The Anglian Region 44
5.3 Silver Birches plc 45
5.4 Drought management: the infrastructural strategy 47
5.5 Drought management: the informational strategy 5 51
5.6 Conclusion 56
6 The potential role for economic instruments in drought management 58
6.1 Introduction 58
6.2 The water economy 59
6.3 The Anglian Region 59
6.4 The Region’s water economy 60
6.5 The Agency’s drought plan 62
6.6 Anglian water services’ drought plan 63
6.7 Drought plans and the water economy 64
6.8 Economic instruments 65
6.9 Conclusions 67
7 ‘Virtual water’ and Occam’s razor 68
7.1 Introduction 68
7.2 A water deficit resolved 69
7.3 A critique of the virtual water thesis 70
7.4 Occam’s razor 71
7.5 Conclusion 71
8 Virtual water and the Kyoto consensus 72
8.1 The use of metaphor 72
8.2 Crops, crop water and water deficits 73
8.3 The Kyoto consensus 74
9 The urban market for farmers’ water-rights 77
9.1 Introduction 77
9.2 The urban actors’ demand function 78
9.3 The farmers’ supply function 80
9.4 The limits to theory 80
9.5 Conclusions 85
10 The demand for water: four interpretations 86
10.1 Introduction 86
10.2 The use of water 87
10.3 The consumption of water 88
10.4 The need for water 88
10.5 The economic demand for water 88
10.6 Supply-side leakage and evaporation 89
10.7 Conclusions 90
11 The political economy of water abstraction charges 91
11.1 Introduction 91
11.2 Abstraction charges and the theory of rent 92
11.3 A charge-setting taxonomy 93
11.4 Abstraction charges and sustainable catchment management 96
11.5 The impact on users 98
11.6 Final remarks 99
12 Twelve theses on the cost and use of irrigation water 101
12.1 Thesis 1 101
12.2 Thesis 2 101
12.3 Thesis 3 101
12.4 Thesis 4 102
12.5 Thesis 5 102
12.6 Thesis 6 102
12.7 Thesis 7 102
12.8 Thesis 8 102
12.9 Thesis 9 103
12.10 Thesis 10 103
12.11 Thesis 11 103
12.12 Thesis 12 103
13 Behavioural studies of the domestic demand for water services in Africa 104
13.1 A methodological revolution 104
13.2 Market networks for water 106
13.3 The uses of water 108
13.4 Objects or subjects? 110
13.5 The discrete choice model 113
13.6 Conclusions 114
14 Deconstructing households’ willingness-to-pay for water in low-income countries 116
14.1 Introduction 116
14.2 Survey methods 117
14.3 Sign and behaviour 118
14.4 Demand theory and survey practice 119
14.5 The affordability question 120
14.6 The treatment of substitutes 121
14.7 Sign and sanction 123
14.8 Private agendas 124
14.9 Anchor prices 126
14.10 Conclusion 128
15 Industrial effluent policy: economic instruments and environmental regulation 130
15.1 Introduction 130
15.2 The generation and regulation of industrial effluent 131
15.3 The objectives of disposal charges 132
15.4 The demand for waste water services 133
15.5 The measurement of pollution 135
15.6 The design of disposal charges: the utilities 136
15.7 The design of disposal charges: the environmental regulator 137
15.8 Conclusions 138
16 Nitrate pollution on the Island of Jersey: managing water quality within European community directives 140
16.1 Introduction 140
16.2 Nitrate pollution of groundwater and surface waters 141
16.3 Water quality management by the Department of Agriculture and Fisheries 143
16.4 Water quality management by the JNWWC 144
16.5 Water quality management of domestic abstractions: the Department of Environmental Health 147
16.6 Water quality management of waste water discharges: the Environment and Public Services Department 148
16.7 The benefits of nitrate pollution management 149
16.8 Conclusions 155
17 Catchment water deficits in the twenty-first century 158
17.1 Introduction 158
17.2 The Dwyer catchment 160
17.3 Redemptive options (I) 161
17.4 Redemptive options (II) 163
17.5 From surplus to deficit 164
17.6 Framework, theory and empirical studies 165
17.7 Conclusion 166
18 Catchment water deficits: an application to Zambia’s Kafue river basin 167
18.1 Introduction: the general hypothesis 167
18.2 The Kafue River Basin 168
18.3 Groundwater abstraction 170
18.4 The economic demand for water 171
18.5 The supply of food 172
18.6 Environmental needs 172
18.7 Conclusions 173
19 The Thames catchment: a River Basin at the tipping point 178
19.1 Introduction 178
19.2 The Kafue catchment 179
19.3 The analysis of densities 179
19.4 The Thames River Basin 181
19.5 The Thames in water deficit? 185
19.6 Density analysis of the Thames River Basin 186
19.7 Tipping deeper into deficit 188
19.8 Conclusion 189
20 Water resource impacts of new housebuilding in the Thames Region: 2006–2025 191
20.1 Introduction 191
20.2 The baseline situation 192
20.3 The increase in homes 2006–2025 194
20.4 Addition and subtraction 194
20.5 Choices 196
21 Beneficial impacts for the Thames River Basin of water company leakage reduction 2006–2025 198
21.1 Introduction 198
21.2 Leakage in the Thames Region: some basic facts 199
21.3 Forecasting the reduction in total leakage 200
21.4 Conclusions 203
Bibliography 205
Index 214