World Bank bets on ‘socially responsible’ water pricing.

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May 21, 2012 | Shared as an educational material

Making users pay for water should be part of any policymakers’ toolkit to manage scarcity, says Lars H. Thunell of the World Bank’s International Finance Corporation. But with safe drinking water now officially recognised as a human right, this has to be done in “a socially responsible way,” he argues.

With the world population growing from 7 billion to around 10 billion by 2050, water scarcity is fast becoming a top political concern for decision-makers around the globe.

“We really have a problem,” said Lars H. Thunell, a Swedish national who was appointed in 2006 as executive vice-president of the International Finance Corporation (IFC), part of the World Bank Group.

“The whole issue is you’ve got scarcity and there are only two ways to resolve it,” Thunell told EurActiv in an interview.

“One is either you have to start rationing, which isn’t a very effective solution, which also has side effects. Or you’ve got to raise the price but you’ve got to do it in a socially responsible way.”

Whichever way you look at it, growing water stress around the world means that policymakers will have to put a price on the scarce resource, the Swede says.

And since safe drinking water is now officially recognised as a fundamental human right by the United Nations, this means businesses and farmers will have to foot the bill.

“We have to recognise that a certain amount of water every day is a human right. And that’s a fact of life. But we should remember that only about 1.5% of all the water that is used is used for those purposes,” Thunell said.

The consequence is that pricing measures will have to be introduced to manage the remaining 98.5% of water resources that are used for other purposes – mainly agriculture, home and industrial purposes.

“In a world where you have scarcity, you have to have a price on things. But you also have to take the social dimension into consideration,” said Thunell.

“I like, for example, the South African model where they say that you get a certain amount of free water every day but if you want to use it for industrial purposes or filling a swimming pool or taking ten showers a day, you have to pay for it.”

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