Water Sustainability What Is Your

Water Sustainability

What is your conclusion about the merits of water markets and private property rights for improving water sustainability?

The Debate over Water Rights

What is a market-based approach to water

The Value of a Market-based approach

examples from Chile

The Dangers of a Market-based approach

failings in the U.S. West

What it means when water becomes a commodity

F. Conclusion: The Appeal and Inherent Dangers in the Commodification of Water

The Appeal and Dangers in the Commodification of Water

The world is in a water crisis. Even in those place of the world not facing problems with access to clean water, facing persistent drought, or any other problems that reduce the availability of water, climate change looms on the horizon to threaten future water shortages that will plague all societies. Facing this challenge head-on has been a major focus for many nations, international groups such as the World Bank, and many private organizations. One stratagem that is not without passionate supporters and detractors is the commodification of water resources or, put another way, the opening up of water to the same market forces that dictate the price of any other consumer good whose scarcity necessarily fluctuates (Postel and Richter 112). But as we shall see from examples of the commodification of water, not to mention a discussion of exactly what that would mean, the long-term dangers of such an economic approach far outweigh any short-term pricing benefits that can be mustered.

By any definition of the situation, water has always been an economic resource for human societies. Some critics treat the idea that water usage can be regulated through the market as utter anathema, but the reality is that it has been this way throughout the length of human civilization. As Brown explains, "By very definition, for something to be 'economic' means that it is scarce relative to the uses to which it can be put [...] water has been recognized and treated as an economic good by every civilization that encountered a scarcity of it" (3). In other words, because water has always been a limited resource and, therefore, not infinitely available for all uses simultaneously, its use by human societies has invariably treated it as a scarce resource that might be more valuable during different periods of time (e.g., the value of water, monetary or not, would be higher during a drought).

As such, proponents of water markets argue that it is only natural, then, to extend our free market system to the valuation of water in society. Such a turn should improve the management of a scarce resource by applying an efficient and universal value to different water-related activities such as personal use, agriculture, or hydropower. Proponents of this system, such as was implemented in 1981 in Chile, argue that the "existence of a water market means [...] that behavior is not driven by the financial cost of the water but rather by the opportunity cost -- if the user values the water less than it is valued by the market, then user will be induced to sell the water" (Briscoe, Salas, and Pena 3). In Chile, in some situations, this has been perceived to be a positive thing because it allows individuals who own surface or subsurface water rights to sell, lease, or barter through a marketplace with individuals who do not possess the same water resources. The purpose, and it works well in some situations in Chile, is to allow individuals in the nation to value the water-related activities that are most important to them and then trade or sell water resources accordingly (Postel and Richter 113). This has allowed relatively water-rich areas to profit by selling their excess or unneeded water to relatively water-poor areas of the country or to individuals, companies, or groups that value the water for sale higher than the owner of the resources does. As Postel and Richter point out, "Water markets also provide opportunities for conservation groups, government agencies, or others to purchase water or water rights specifically to enhance river flows" (Postel and Richter 112).

But, of course, simply because Chile's water trading system has not utterly collapsed in failure in the last thirty years does not mean that the commodification is necessarily always, or even ever, a positive thing. There have been persistent problems, including "a range of critical water management issues, such as social equity, environmental protection, river basin management, coordination of multiple water uses, and resolution of water conflicts" (Bauer, Siren Song 2). Similarly, the concept of the privatization of water resources in the American West has been fraught with challenges as the short-term goals of 19th century laws has crafted water as a legal commodity whose only value is in the furtherance of human industry and economy. Water policy and the laws that developed around it in the 19th century United States West emphasized economic growth ahead of all other values in an effort to populate and capitalize on the resources (not water) of the West. Weighted heavily with the notion of private property, water rights in the U.S. West has inevitably favored short-term returns even at the expense of long-term consequences and collective concerns (Bates et al., 130, 144). The inevitably effect in the U.S. West, as demand for fresh water has increased dramatically throughout the 20th century has been embattled conflict over limited water resources. States, individuals, and corporations with access to greater water resources are able to utilize, and even waste, them however they see fit under the law with little regard for the collective damage their actions may cause.

Despite this obvious failing, some still argue that in order to manage water resources more efficiently, it is the best course of action to commodify all water resources the world over. Chile is often cited as an example of the positive power of the free market to manage its limited water resources, despite only limited success and many associated failings. From this point-of-view, "the economic value of water is the same as its market price," a point-of-view that critics argue is unacceptable because it does not acknowledge the basic necessity of fresh water not only to human life but to all life (Bauer, Siren Song 10). What is dangerous and new about the commodification of water in the modern world is not that it values water, but that it divorces water from its essential uses within not only human communities but also within the larger community of life (Brown 4).

The reality that the world faces it not simply that water is a limited resource, but that it is an essential limited resource without which life of any kind cannot continue. To treat it as a commodity that has no value outside of its monetary market worth is not just unacceptable, it is potentially catastrophic. The success of Chile's law to siphon water towards more socially desirable uses is not relevant in a potential future situation in which there is literally no more fresh water to be had. The application of an economic veneer to water scarcity is built on the false economic notion that, like any other commodity, if more is needed then more can be produced. But because that will never be the case with worldwide water resources, turning to water markets and trading schemes as a means to manage limited resources will never be an effective long-term strategy. More likely, the markets will continue to function right up until that last moment when there is just no more fresh water to be had.

Question #2: Does the experience of the World Commission on Dams support Postel & Richter's comments on persistent conflict over water allocation or use?

Outline

A. Introduction: The Issue of Involvement in Water Management

B. Left Out of the Discussion

a. traditional models of debate and discussion

b. The consequences for stakeholders without a voice

C. The WCD experience

a. organization of the WCD stakeholders

b. usefulness to soliciting a wider view of impacts

D. Applying the WCD approach on more water management issues

a. reasons why: enhancing our understanding of the impact

b. conclusions: decentralizing the debate

Decentralizing Water Resource Management

Postel and Richter have rightly pointed out that the "examination of any persistent conflict over water allocation or use almost always turns up two common ingredients: first, not everyone affected by the decision has had a say in making it; and second, the decision reflects the politics of power and influence rather than the broader public good" (Postel and Richter 167). In other words, the people who are making decisions about water resource management aren't necessarily the people who have to deal with the consequences or live with any mistakes that are made. Further, because those making the decisions about water management tend to be in positions of political power, the inevitable infusion of politics into water resource management suggests that the decisions made won't even necessarily be judicious ones, but instead expedient ones. For the vast majority of the world's population that have little or no political capital, the end-result can be that decisions are made which can have disastrous impacts on the day-to-day lives of ordinary citizens in communities throughout the world. The case of the World Commission on Dams is a good example of how this tendency to centralize water resource management can be mitigated, if not completely eliminated.

The political reality of the world is that government represents more than just laws and policies, just as management and governance has to be about more than just enacting laws and edicts, but should reflect the values of the community and the interests of the communities that will be summarily affected by those policies. In the case of water resource management, this means that it must be a prerequisite to involve a wider variety of community stakeholders as part of the decision-making process in order to make more "equitable and sustainable use of rivers. But in most countries, the cards are stacked heavily against an inclusive and more balanced process. Patterns of governance for the most part still reflect the utilitarian mind-set of the twentieth century, which focused on the engineering challenges of bringing rivers under control for society's economic advancement" (Postel and Richter 168). Accordingly, the issue that governments traditionally consider with regard to water resource management has been how to accomplish specific tasks that will, presumably, benefit the political or economic landscape. Little thought has been traditionally given to how such decisions would impact the people who actually have to live with those decisions: in the case of dam construction, those individuals whose lives and livelihoods might be displaced permanently by the presence of an enormous lake where there once was a river.

The World Commission on Dams, sponsored by the World Bank, found that this traditional model is rife with failings and invariably fails to take into account local and regional social and environmental impacts, focusing instead on technical or political benefits instead. After two years of intense study, the WCD found that diversifying stakeholder involvement throughout the communities that would be affected by dam-related decisions needed to be a project requirement. Referencing the WCD Knowledge Base of Dams, the Commission recognized a failure to include the interests of affected people in the planning process or, when involved, the political power and right to participate in the process and ensure that their voices were considered. The WCD found that "in terms of the social impacts of dams, [...] negative effects were neither adequately assessed nor accounted for [and that the] range of these impacts is substantial, including on the lives, livelihoods, and health of the affected communities dependent on the riverine environment" ("Dams and Development" 16-19).