Water Use Policy and Economics

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Water Supply & Sanitation

There has been much controversy concerning ownership of the institutions that manage drinking water and wastewater. Privatization [view report] of water utility ownership and operations grew markedly during the 1990s, driven in part by a great need for water infrastructure maintenance and replacement. Depending on the size of the water system, tax laws, and local values, some degree of privatization can be an alternative in many instances. The free market is also beginning to operate in the form of water transfers [view report], driven by the growth of water markets. Water markets depend on an understanding of the value of groundwater [view report] and surface water - for in situ uses such as sustaining wetlands as well as for extractive uses such as agriculture.

While such transfers add a level of efficiency to water use that has been missing from early water development in the U.S., there can be negative impacts on the environment, rural communities, and other third parties that result when water is transferred from, for example, agricultural to urban use. Such impacts are on top of many other changes affecting irrigated agriculture [view report], such as growing competition for water, new developments in technology, potentially changing levels in federal subsidies for crops and water, uncertainties related to American Indian water rights, and concern about environmental problems.

The event of September 11 has heightened security concerns for the safety of our public infrastructures. The EPA, which is the lead agency responsible to protect the U.S. water systems to deliberate attacks have developed Water Security Research and Technical Support Action Plan. The NRC has reviewed this plan [view report]by looking at the key issues for drinking water and wastewater, research and technical support needs, and support projects to achieve their gals.

All of these issues assume that we have a good understanding of how much water is being used, and for what. While the National Water-Use Information Program [view report] works hard to answer this question for the U.S., the fact that water use information is decentralized and many water uses are not permitted make this a challenging question to answer for many kinds of usage.

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