Abstract
Water management is one of the main issues in the water policy agenda. More than a quarter of the world's population will experience severe water scarcity. Although there is board agreement on the importance of incorporating the concept of scarcity into water-management strategies and decision making, the lack of a standardized approach to embedding water scarcity has hindered progress in this direction. In recent years, pricing household water has been proposed as a tool for managing water scarcity in a national context. The objective of this work is to design a water-pricing model that better signals the value of water scarcity by considering water supply and demand at the same time. The proposed scarcity-based pricing model focuses on the variable component of the tariff and follows an increasing block strategy. The case study of the Taipei Water Resource Domain (Taiwan) is used to illustrate the method. It is Greater Taipei’s main source of fresh water. By calculating the supply, demand, and budget of water resources in northern Taiwan, this study also determines the visible spatial distribution of water scarcity. The results show that both the supply and demand of water resources changed considerably under three scenarios, namely, low rainfall, average rainfall, and extreme rainfall. This demonstration illustrates a pathway for the implementation of a proposed scarcity-based pricing policy as a signal for users to adjust their water consumption in a proactive manner.
Similar content being viewed by others
References
Alcamo J, Döll P, Henrichs T, Kaspar F, Lehner B, Rösch T, Siebert S (2003) Global estimates of water withdrawals and availability under current and future “business-as-usual” conditions. Hydrol Sci J 48(3):339–348
Barbosa A, Brusca I (2015) Governance structures and their impact on tariff levels of Brazilian water and sanitation corporations. Util Policy 34:94–105
Bejranonda W, Koch M, Koontanakulvong S (2013) Surface water and groundwater dynamic interaction models as guiding tools for optimal conjunctive water use policies in the central plain of Thailand. Environ Earth Sci 70(5):2079–2086
Burkhard B, Kroll F, Nedkov S, Müller F (2012) Mapping ecosystem service supply, demand and budgets. Ecol Ind 21:17–29
Cocos A, Cocos O, Sarbu I (2012) Coping with water scarcity: the case of the Calnistea catchment (Romania). Environ Earth Sci 67(3):641–652
Cosgrove WJ, Rijsberman FR (2010) World water vision: making water everybody's business. Routledge
Daily GC, Polasky S, Goldstein J, Kareiva PM, Mooney HA, Pejchar L, Ricketts TH, Salzman J, Shallenberger R (2009) Ecosystem services in decision making: time to deliver. Front Ecol Environ 7(1):21–28
Falkenmark M, Lundqvist J, Widstrand C (1989) Macro-scale water scarcity requires micro-scale approaches. Nat Resour Forum 13:258–267
Farolfi S, Gallego-Ayala J (2014) Domestic water access and pricing in urban areas of Mozambique: between equity and cost recovery for the provision of a vital resource. Int J Water Resour Dev 30(4):728–744
Fisher B, Turner RK, Morling P (2009) Defining and classifying ecosystem services for decision making. Ecol Econ 68(3):643–653. https://doi.org/10.1016/j.ecolecon.2008.09.014
Geng X, Wang X, Yan H, Zhang Q, Jin G (2014) Land use/land cover change induced impacts on water supply service in the upper reach of Heihe River Basin. Sustainability 7(1):366–383
Grafton RQ, Kompas T (2007) Pricing sydney water. Aust J Agric Resour Econ 51(3):227–241
Grafton RQ, Ward MB (2008) Prices versus rationing: Marshallian surplus and mandatory water restrictions. Econ Rec 84:S57–S65
Grafton RQ, Ward MB (2011) Dynamically efficient urban water policy. CWEEP research paper, pp 10–14
Grafton RQ, Chu L, Kompas T (2015) Optimal water tariffs and supply augmentation for cost-of-service regulated water utilities. Util Policy 34:54–62. https://doi.org/10.1016/j.jup.2015.02.003
Guerrini A, Romano G (2013) The process of tariff setting in an unstable legal framework: an Italian case study. Util Policy 24:78–85
Hoekstra AY, Mekonnen MM, Chapagain AK, Mathews RE, Richter BD (2012) Global monthly water scarcity: blue water footprints versus blue water availability. PLoS ONE 7(2):e32688
Hughes N, Hafi A, Goesch T (2009) Urban water management: optimal price and investment policy under climate variability. Aust J Agric Resour Econ 53(2):175–192
Islam MS, Oki T, Kanae S, Hanasaki N, Agata Y, Yoshimura K (2007) A grid-based assessment of global water scarcity including virtual water trading. Water Resour Manage 21(1):19
Jaeger WK, Plantinga AJ, Chang H, Dello K, Grant G, Hulse D, McDonnell J, Lancaster S, Moradkhani H, Morzillo A (2013) Toward a formal definition of water scarcity in natural-human systems. Water Resour Res 49(7):4506–4517
Kummu M, Guillaume J, de Moel H, Eisner S, Flörke M, Porkka M, Siebert S, Veldkamp TI, Ward PJ (2016) The world’s road to water scarcity: shortage and stress in the 20th century and pathways towards sustainability. Sci Rep 6:38495
Letsoalo A, Blignaut J, De Wet T, De Wit M, Hess S, Tol RS, Van Heerden J (2007) Triple dividends of water consumption charges in South Africa. Water Resour Res 43(5).
Macian-Sorribes H, Pulido-Velazquez M, Tilmant A (2015) Definition of efficient scarcity-based water pricing policies through stochastic programming. Hydrol Earth Syst Sci 19(9):3925–3935
Mamitimin Y, Feike T, Seifert I, Doluschitz R (2015) Irrigation in the Tarim Basin, China: farmers’ response to changes in water pricing practices. Environ Earth Sci 73(2):559–569
Molinos-Senante M, Donoso G (2016) Water scarcity and affordability in urban water pricing: A case study of Chile. Util Policy 43:107–116
Munia H, Guillaume J, Mirumachi N, Porkka M, Wada Y, Kummu M (2016) Water stress in global transboundary river basins: significance of upstream water use on downstream stress. Environ Res Lett 11(1):014002
Oki T, Kanae S (2006) Global hydrological cycles and world water resources. Science 313(5790):1068–1072
Olmstead SM, Hanemann WM, Stavins RN (2007) Water demand under alternative price structures. J Environ Econ Manag 54(2):181–198
Pesic R, Jovanovic M, Jovanovic J (2013) Seasonal water pricing using meteorological data: case study of Belgrade. J Clean Prod 60:147–151. https://doi.org/10.1016/j.jclepro.2012.10.037
Qu Y, Zhang N, Xie C (2011) Pricing of water resources based on consumption pattern-taking water resources of the south-to-north water transfer project as a case. In: 2011 International Conference on Management and service science
Raskin P, Gleick P, Kirshen P, Pontius G, Strzepek K (1997) Water futures: assessment of long-range patterns and problems. Comprehensive assessment of the freshwater resources of the world. Stockholm Environment Institute
Rogers P, De Silva R, Bhatia R (2002) Water is an economic good: how to use prices to promote equity, efficiency, and sustainability. Water Policy 4(1):1–17
Sağlam Y (2015) Supply-based dynamic Ramsey pricing: avoiding water shortages. Water Resour Res 51(1):669–684
Sahin O, Stewart RA, Porter MG (2015) Water security through scarcity pricing and reverse osmosis: a system dynamics approach. J Clean Prod 88:160–171
Sahin O, Bertone E, Beal C, Stewart RA (2018) Evaluating a novel tiered scarcity adjusted water budget and pricing structure using a holistic systems modelling approach. J Environ Manage 215:79–90. https://doi.org/10.1016/j.jenvman.2018.03.037
Schewe J, Heinke J, Gerten D, Haddeland I, Arnell NW, Clark DB, Dankers R, Eisner S, Fekete BM, Colón-González FJ (2014) Multimodel assessment of water scarcity under climate change. Proc Natl Acad Sci 111(9):3245–3250
Schlosser CA, Strzepek K, Gao X, Fant C, Blanc É, Paltsev S, Jacoby H, Reilly J, Gueneau A (2014) The future of global water stress: an integrated assessment. Earth Future 2(8):341–361
Seckler D, Barker R, Amarasinghe U (1999) Water scarcity in the twenty-first century. Int J Water Resour Dev 15(1–2):29–42
Sibly H, Tooth R (2014) The consequences of using increasing block tariffs to price urban water. Aust J Agric Resour Econ 58(2):223–243
Sigel K, Altantuul K, Basandorj D (2012) Household needs and demand for improved water supply and sanitation in peri-urban ger areas: the case of Darkhan Mongolia. Environ Earth Sci 65(5):1561–1566
Smakhtin V, Revenga C, Döll P (2004) A pilot global assessment of environmental water requirements and scarcity. Water Int 29(3):307–317
Steffen W, Richardson K, Rockström J, Cornell SE, Fetzer I, Bennett EM, Biggs R, Carpenter SR, De Vries W, De Wit CA (2015) Planetary boundaries: Guiding human development on a changing planet. Science 347(6223):1259855
Trisurat Y, Eawpanich P, Kalliola R (2016) Integrating land use and climate change scenarios and models into assessment of forested watershed services in Southern Thailand. Environ Res 147:611–620
UN (2013) World population prospects: The 2012 Revision. Population Division, Department of Economic and Social Affairs, United Nations, New York
Vanham D, Hoekstra AY, Wada Y, Bouraoui F, de Roo A, Mekonnen MM, van de Bund WJ, Batelaan O, Pavelic P, Bastiaanssen WGM, Kummu M, Rockström J, Liu J, Bisselink B, Ronco P, Pistocchi A, Bidoglio G (2018) Physical water scarcity metrics for monitoring progress towards SDG target 6.4: An evaluation of indicator 6.4.2 “Level of water stress”. Sci Total Environ 613–614:218–232. https://doi.org/10.1016/j.scitotenv.2017.09.056
Vörösmarty CJ, Green P, Salisbury J, Lammers RB (2000) Global water resources: vulnerability from climate change and population growth. Science 289(5477):284–288
Vörösmarty CJ, McIntyre PB, Gessner MO, Dudgeon D, Prusevich A, Green P, Glidden S, Bunn SE, Sullivan CA, Liermann CR (2010) Global threats to human water security and river biodiversity. Nature 467(7315):555–561
Wang XJ, Zhang JY, Shahid S, Bi SH, Yu YB, He RM, Zhang X (2015) Demand control and quota management strategy for sustainable water use in China. Environ Earth Sci 73(11):7403–7413
Zhang L, Dawes W, Walker G (2001) Response of mean annual evapotranspiration to vegetation changes at catchment scale. Water Resour Res 37(3):701–708
Zhang R, Duan Z, Tan M, Chen X (2012) The assessment of water stress with the Water Poverty Index in the Shiyang River Basin in China. Environ Earth Sci 67(7):2155–2160
Acknowledgements
This work was financially supported by National Taiwan University from Excellence Research Program - Core Consortiums (NTUCCP-107L891301), NTU Research Center for Future Earth from The Featured Areas Research Center Program within the framework of the Higher Education Sprout Project by the Ministry of Education (MOE) in Taiwan, and the Ministry of Science and Technology (MOST) of Taiwan (No. 107-2627-M-002-015).
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
This article is a part of Topical Collection in Environmental Earth Sciences on Water Sustainability: A Spectrum of Innovative Technology and Remediation Methods, edited by Dr. Derek Kim, Dr. Kwang-Ho Choo, and Dr. Jeonghwan Kim.
Rights and permissions
About this article
Cite this article
Yuan, MH., Lo, SL. & Chiueh, PT. Embedding scarcity in urban water tariffs: mapping supply and demand in North Taiwan. Environ Earth Sci 78, 325 (2019). https://doi.org/10.1007/s12665-019-8318-9
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s12665-019-8318-9