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Promoting Wise Use of Water: Application of Economic Instruments

In Sustainable Consumption and Production in the Asia-Pacific Region: Effective Responses in a Resource Constrained World Vol III, 2010 Series: 2010-06

Water stress is a critical issue globally, in particular in developing Asia, where many people live without access to safe water. In addition to long-standing socio-economic factors such as population growth, climate change has intensified concerns over water stress. This chapter addresses the following points in the discussion on promoting sustainable water usage, in particular by using economic instruments as policy tools.

• To cope with the escalating water stress, sustainable water consumption in all water use should be promoted rather than focusing on new water development.

• Cases in which economic instruments (EI) are applied in Asian countries show that EI alone cannot promote sustainable consumption.

• EI does not automatically prevent the poor from accessing safe water, but it is a necessary instrument in providing them with appropriate financial support such as subsidised connection costs.

• To apply water pricing effectively, clear water use rights, proper metering systems, and improved credibility of water supply services (e.g., stable supply hours, quality of water supplied) are examples that make EI workable.

• Current sectoral management is a barrier to reflecting the true economic value of water. The concept of integrated water resources management should be promoted.

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