Increasing global water scarcity has necessitated water resource management; a vital aspect of water management is water valuation.
Water and its Value
Holistically speaking ’valuing water’ means recognizing the ‘worth’ of water. This does not imply just the economic value of water, as may be widely interpreted, but considering the range of benefits and risks associated with water. Unless all these are included, i.e. its economic, social and ecological dimensions, water value can not be completely accurate.
The most common interpretation of the ‘value’ of any product or service is the economic value, i.e., its cost or price. Traditionally, water has been treated as a free social good that is abundantly and naturally available, however increased consumption across various sectors and the resultant scarcity necessitated assigning it an economic value. The International Conference on Water and Environment (ICWE) held in Dublin in 1992, declared that "water has an economic value in all its competing uses and should be recognized as an economic good[1].”
In a market system, the economic value, or price, optimises the consumption of a good or service; same is true of water. Its economic value, defined by its price, will not only help allocate water optimally among various uses, i.e., the use which will give maximum benefits, but also reduce wasteful consumption. This is especially important considering global water scarcity.
Apart from this, water supply also has a cost attached to it - the cost of sourcing, purifying, storing and distributing water. Economically speaking and from the point of view of water utilities, costs of installation and maintenance of the infrastructure for water supply can be taken as the (bare minimum) price of water.
Most of the time, inefficient water use and water wastage occur because water users rarely pay the full cost of using water. If actual cost is recovered from water consumers, the huge investments required to provide clean and safe water can be financed.
Coming to the social aspect of water, water has tremendous environmental value. It supports multiple life forms - both flora and fauna; rivers deposit sediments on floodplains thereby nourishing soils and making them useful for agriculture. Current climate change effects and global warming are probably impacting this facet of water the most.
Apart from environmental impact, the most vital social value of water is its ability to sustain life and health. Then water has community values as well, in its religious and spiritual, and aesthetic and recreational dimensions. Water has historically been connected with the cultural and spiritual development of many civilisations. The ancient Egyptians worshipped Sobek, god of the Nile river, while in Aztec mythology, the goddess Chalchiuhtlicue represented various manifestations of water and was involved in every part of life, from birth to death[2]. Indians continue to revere their rivers as Mother Goddesses depicting them as life-giving and nurturing entities.
Water, in its various forms like lakes, ponds, waterfalls and fountains etc. adds to scenic beauty and visual appeal. Water activities and sports are popular recreational and tourist activities. Wetlands attract migratory water-birds from distant regions, making them and water-bodies a focal point for birdwatchers.
All these factors, while some may seem intangible, add to the value of water.
Why is water value so important?
According to the 2021 World Water Development Report, “Recognizing, measuring and expressing water's worth, and incorporating it into decision-making, are fundamental to achieving sustainable and equitable water resources management and the Sustainable Development Goals (SDGs) of the United Nations' 2030 Agenda for Sustainable Development”.
Efforts are needed to stop mismanagement and wastage of water. The unsustainable use of water can be partly due to the fact that its full value is not appreciated and paid. This may be due to 2 reasons, first, that water use is subsidised, and second, its social costs are not taken into account.
In summary, it can be said that water holds different significance for different people in different circumstances. Moreover, the ‘value’ of water is much more than its economic value, which is the only one considered by policy makers today. Though the concept of water valuation is wide-ranging and complex, undervaluing this precious resource would only lead to inefficient water management.