Saturday, August 23, 2008

The real price of drinking a glass of water

It is usual for most of us to get fresh water any time we need. A plain glass of water, seems to be most basic action at no monetary cost. We have not realized yet that such a simple need ,is also in danger of become very expensive. Would anyone imagine taking water pills?.
2500 scientist, politicians , and delegates from 140 countries ,are debating about the rational use of water. Rotarians ara also very active about this issue. Despite the fact that society is becoming a knowledge society, it lacks basic understanding about the proper use of water resources. 97,5% of the water available in the whole planet ,is too salty to be suitable for human consumption, and only 0,26% of water for human consumption is accessible for such a purpose ,because the rest of it, either it is on the poles, or deep underneath the earth.250 rivers ,some of them trans frontiers, cover 40 % of world water demand. Thus , It seems feasible and not far away the chance that water might become a source of conflict, just as it has become oil.-
On the other side, 1200 million people, 20% of world population ,lacks sufficient water supply.200 million get diseases close related to shortage of good quality water ,and 3 to 4 million people die because of that. Besides, 6000 children (part of world human capital)die because of the same reason .All of this means a very high social cost for wasteful water consumption, so high in comparison with private cost( almost zero),that a feasible alternative to improve the rationality of our daily water consumption pattern, might turn out to be a proportional tax: the more water people consume the higher the tax, to induce more efficiency in the use of this increasingly scarce resource. It is a paradox, that a tax ,supposedly inefficient, would comes out to solve an inefficiency. Of course ,It all depend about the purpose and the expected outcome.
Although I do not like too much taxes, this one can be unavoidable, because it is the way to solve what otherwise would imply very transaction cost ,given the fact that there is not clearly defined property right ,on the current sources of water. Therefore, as a matter of fact nobody (scientific asides),cares about the over consumption!.
In Latin America, 125 million people live without proper water networks which affects the quality of life couple with health and sanitary conditions. It follows ,that those people who lacks water, get diseases which are a kind of avoidable ones. These diseases, competes with other normal diseases arising among the population, pressing and increasing the demand for public health, to such extent that it fails to cope with the expectations in terms of quality and scope. Some people do not get public health attention. There is some research available, whose results are very clear: for every (1)euro spent on better water facilities, it is possible to save cost up to 34 euro, because of lower demand for public health .-
On average , consumers use up to 125 lts daily of water , but we are not paying the real cost of such consumption, which become higher for those who get higher levels of water consumption . So , what is it the real cost of a glass of water?. Guessing hardly less, than 35 euro!.