This also means that consumption and price will be completely and directly linked, incentivizing reductions in water uses more so than they are under current pricing structures (though consumption is still charged per-unit, the lack of marginalization distributes prices less equitably in terms of actual expenditure to supply water). This will also give clear signals as to the extent that alternative water supplies should be investigated as a means of augmenting the water supply. Counter-Arguments

The marginal costs of water will make large urban consumers (i.e. municipalities) more likely to consume and agricultural...

Pricing structures that are not attached to volume of consumption in a linear fashion might also meet with more opposition from the public. Finally, estimating long run marginal costs can be quite complex and runs the risk of underestimation, which could lead to underfunding.