ENDING THE UNDERPRICING OF WATER

This chapter addresses the challenge of the chronic underpricing of water resources. In a world of rising water scarcity, the underpricing of water is anathema to good water management. There is growing recognition that this needs to change. Nearly all countries are embarking on pricing reforms and encouraging water markets to emerge. However, most of these efforts are still not confronting the main management paradigm of the modern era's “hydraulic mission,” which is that lack of water can always be met by new sources of supply. As long as this view persists, water pricing and markets will remain peripheral and will have little impact on reducing water scarcity. In short, the lack of appropriate water markets, pricing, and policies is a key symptom of the global crisis in water management.