1. Water Cost Recover Options
Mohamed Abdel Raouf, Program Manager in Environment Research at the Gulf
Research Centre, UAE
Policy-makers in the Arab World have now shifted from entirely supply solutions to demand
management, highlighting the importance of using a combination of measures to ensure
adequate supplies of water for different sectors.
In most countries, effective national institution frameworks have been set up to meet the
demand for water resources management. All the countries of the region have developed
national water plans keeping within the broad lines of Agenda 21.
The first and foremost strategy for sustainable use of water resources is to protect and
conserve the available resources. This calls for harvesting every drop of water through
rainwater harvesting, protecting the natural and manmade storage reservoirs as well as
groundwater aquifers. Besides developing new systems and technologies, protecting the
traditional systems such as the Aflaj in some countries such as Oman is also imperative.
More importantly, reliance on desalinated water alone could be a risky policy considering the
volatile nature of oil prices and revenues. The sustainable use of groundwater resources
should be a consideration in the overall integrated water resource management policy of each
country.
In the context of the agriculture sector, given the large amount of groundwater used for
irrigation, the emphasis should be put on improving irrigation efficiency through: (i)
expanding the use of modern irrigation systems and automated irrigation scheduling systems
to increase water productivity; (ii) shifting from low value and high water consuming crops/
vegetables grown in open fields to high value vegetables grown in greenhouses; and (iii)
reducing the area of high water consuming crops such as fodder
There are a number of Environmental Management policy Approaches to handle
environmental issues such as water ones, these include:
• Command-And-Control Instruments (CAC):
Prescribed behavior based on legislative and mandatory regulations that “command”
polluters to “control” specific activities. They are implemented through directives from
regulatory authorities (i.e., government).
• Market-based Economic Instruments (MBI):
Instruments that generally operate through establishing prices for environmental services via
a market.
• Persuasive Measure:
Is used alongside the other two approaches to offset environmental market failures by
internalizing environmental awareness and responsibility into individual decision-making.
Policy mix:
Experience has showed that specific environmental problems such as water problems are
usually addressed by employing a “policy mix” consisting of various command and control
instruments (penalties and fines), economic instruments (incentives) and awareness and
educational programs. This policy mix needs to address different water issues; besides a more
active role should be assigned for civil society organizations in water related decision-making
and a greater role should be given to the private sector to invest in water projects.
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2. In this context, the right cost recovery option plays a very important role in water
conservation which varies from city to city and according to economic conditions.
The following table summarizes the different cost recovery options adopted and its
implications.
Cost Recovery Details Implication-
Options
Flat Rate Constant fee Water-wasteful behaviour
Uniform Rate Price per liter No special incentives
Decreasing Volumetric rate that Ease the incentive to save water at
Block Rates decreases fro higher use- higher use-levels
levels
Increasing Block Volumetric rate that Economize water use
Rates increases for higher use-
levels
Seasonal Rates Higher price in peak Regardful water use in peak times
season of water scarcity
It is worth mentioning here that, one of the recent initiatives are the new tariff system was
introduced in March 2008 by Dubai Electricity and Water Authority (DEWA). The rising
tariffs will make people more conscious of using water efficiently as it would encourage
customers who fall into the higher categories of consumption to cut back on use. Under the
Slab Tariff System, residents using up to 2,000 kilowatts of electricity and up to 6,000
gallons of water will pay a charge of 20 fils per kilowatt and 3 fils per gallon of water used.
Those using over 6,001 kilowatts of electricity and more than 12,001 gallons of water will be
charged an additional 33 fils and 4 fils per unit respectively.
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3. One must admit that this is a step on the right direction to send signals to consumers about
the true cost of water. However, the new tariff does not apply to UAE nationals. In fact, it
would be better to offer them a monetary allowance and charge their wasteful water
consumption instead according to the new DEWA tariff. From the environmental point of
view, this is more environment-friendly.
This increasing block rates unlike other policy options tools such as flat rate or decreasing
block rate, are one of the best cost recovery options as it sets volumetric rate that increases
for higher use-levels and thus Economize water use.
It is worth mentioning here to refer to the issue of "water pricing" because, very recently,
many voices are calling on adopting water pricing as the best solution, the author completely
refuse this policy and believe it is a misleading solution and it is an imported idea from
capitalism which tries to market everything in the world. In fact government of developing
world need to guarantee what is called the basic line life which provides the basic needs for
people. In many developing countries, people, do not have anything to pay. So, how come we
ask them to pay for water? It might be accepted to have some sort of cost recovery in Arab
countries as now water infrastructures, systems and monitoring. Beside, there is an urgent
need to send some signals to customers about importance of conservation especially with
high living standards and high consumption patterns in the Arab countries. However, this
varies from country to country depending on various economic, political and social
considerations. As well as at the same country from time to time and depending on the
country’s situation ion the economic ladder.
The appropriate cost recovery in water sector promotes resource conservation by encouraging
efficient use of water and facilitates cost recovery. Water tariffs must conform to a set of
conditions, of which the most important is that they are affordable for all, especially the poor,
that they are acceptable to the population and that they are administratively and
institutionally feasible.
Finally, there is no one solution that fits all. Every country may need to tailor own
management system to fit its specific needs. Policy measures vary from state to state and
from local to national and regional levels of governance. Different actors naturally perceive
different problems and priorities.
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