Abstract
Urban water pricing is becoming increasingly important due to the rapid rate of urbanization and the expansion of water reclamation and reuse. The mounting evidence of failures of current pricing schemes makes analyzing their performance essential for understanding the adequacy of economic and sustainability policies in water management. However, urban water pricing policies are complex, serve multiple objectives, and vary widely across regions and countries. This paper presents an assessment framework for urban water pricing policies based on common conditions advocated for well-functioning pricing policies. Using a simplified scorecard, it compares the performance of urban water pricing policies in Jordan and Iran, two countries under growing scarcity pressure. Both countries show serious deficiencies with regard to the economic valuation of water services and the cost recovery of utilities. Public policies are rather oriented towards access and affordability, with Jordan showing a higher level of transparency and competition in tariff-setting. The assessment tool indicates a high potential for experience-sharing in future reforms, which should promote water as a scarce good. Such reforms need to prioritize full cost valuation, participation, and scientifically based designs of local and regional water tariffs.
Highlights
IntroductionThe demands on water pricing policies to achieve a multitude of often-conflicting goals of policymakers, utility managers, environmentalists and civil society seem impossible to satisfy
The demands on water pricing policies to achieve a multitude of often-conflicting goals of policymakers, utility managers, environmentalists and civil society seem impossible to satisfy.Water pricing is supposed to promote water as an economic good in line with the Dublin Principles for Water Management of 1992
This study develops one such simple assessment by focusing on conditions commonly propagated for urban water pricing policies to achieve key objectives such as efficiency, full cost recovery, and equity
Summary
The demands on water pricing policies to achieve a multitude of often-conflicting goals of policymakers, utility managers, environmentalists and civil society seem impossible to satisfy. Water pricing is supposed to promote water as an economic good in line with the Dublin Principles for Water Management of 1992. Water pricing goals go beyond economic efficiency and include sustainability and equity, among many other objectives [1]. Water prices should be transparent, legitimate, easy to administer, fair, etc. Water scarcity can be addressed through economic full pricing, while the objectives of affordability and transparency can be understood as contributing factors to equity. On a local level, policymakers might pursue other objectives not related to scientific debates on pricing
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