By Rich Bowden:

Developing economies in the Australasian/Pacific region will be affected if a push from the world’s richest nations to raise water prices is successful.

The Paris-based OECD is renewing the case for a big increase in global water tariffs in an attempt to combat increasing water scarcity due to wasteful water use and population growth.

A recent report released by the Organisation for Economic Cooperation and Development (OECD) states that one in every two people will live in water-stressed areas by 2030, with climate change and the wasteful use of water combining to increase access to the resource.

According to an April 27 report in the Guardian, experts are convinced the raising of the price of water is the only effective way to reduce wasteful use, in households, industry and agriculture.

“Putting a price on water will make us aware of the scarcity and make us take better care of it,” the Guardian quoted OECD secretary-general, Angel Gurría, as saying.

The Paris-based OECD, which represents thirty of the wealthiest countries in the world, added that the artificially low price of water due to Government subsidies, also led to inadequate funding in public utilities, often leading to underinvestment in its infrastructure.

The group issued three reports last week, all calling for global water prices to increase as a recognition of the growing water scarcity crisis. The OECD’s push has been backed by statements released by delegates at a meeting of the World Bank in New York last week to discuss water prices, the Guardian continues.

“Everyone said water must be somehow valued: whether you call it cost, or price, or cost recover,” said Usha Rao-Monari, senior manager of the International Finance Corporation‘s (IFC) infrastructure department who raised the issue at the Bank’s meeting. “It’s not an infinite resource, and anything that’s not an infinite resource must be valued.”

However efforts to raise water prices in the past have always proven to be controversial. Many NGOs and water experts have said the burden of higher water prices will fall unfairly on poorer people unable to pay the price of a resource many have regarded as a fundamental right.

Aid organisation Oxfam outlined the effect of raising prices in a statement.

“Market-led solutions have often undermined the provision of essential services and have had a negative impact on the poorest and most vulnerable communities,” said a spokesman.

Tags: climate change water, oecd water, water price, water scarcity