Of course, the physical nature of both resources plays a big role. As an example; crude oil and natural gas are easier to transport than freshwater; in addition to the fact that unlike freshwater resources, energy resources are not prone to contamination. However, despite the differences in physical characteristics; the disparity between water supply and electric supply is still thought-provoking to say the least. Why would providing a service which was once thought of as a luxury be more prominent than a basic need for human life. Perhaps it is indeed due to the fact that access to electricity is not considered a human right, while water and sanitation are. This might come as counter-intuitive; yet the signs are clear. It is easily noticeable that people are more willing to pay for the service of electric supply rather than pay for the services of sanitation and water supply; despite the fact that the latter is much more essential to their wellbeing.
I think this absurdity stems from the lack of understanding of the public towards the field of water and sanitation. The general public –in both developed and developing countries are ignorant of the costs required to provide a 24/7 water supply service on a household level. In fact, this service has been taken for granted due to the cheap water tariffs customers are accustomed to pay in most countries. This scenario is in fact dangerous and has a multidimensional impact on the mind-set of people.
To summarize, water and sanitation are essential to the lives of human beings, which pushed human-right activists to advocate for them, until they became established human rights in 2010. However, recognizing water and sanitation as human rights – that must be made available and affordable for everyone – might have swayed the public into becoming reluctant in paying for their services; consequently, making it very tricky for the utilities to impose appropriate tariffs. Moreover, this approach has repelled private investors in investing in the sector of water and sanitation, due to low profit margins and the lack of cost recovery on investments. This also explains why energy sectors are in a superior position regarding the participation of the private sector. I do understand that this topic is highly debatable and should not be generalized as water resources and water scarcity are not geographically evenly distributed. According to the “United Nations World Water Development Report 2019”, The region of West Asia and North Africa has the highest level of physical water stress; having over 70% of the water supply from non-renewable sources. For example; the Hashemite Kingdom of Jordan, is in fact the second most water scarce country in world. Therefore, I will be discussing the perspective towards the value of water and sanitation in Jordan.
Water value and tariff structure in Jordan
Due to the severe water scarcity in Jordan; the argument of “Water Right or Service” has become very controversial across the country. I personally believe that it is both, which means an equilibrium between the two notions should be reached. No doubt that water is a human right; depriving any human being from water is similar to depriving him from food or oxygen. However, water must be recognised as a service, especially as the costs of water supply in Jordan are enormous. Operation and maintenance costs alone amounted for 233 million JOD (300 million EUR) in 2017. Therefore, to ensure the sustainability of the sector, heavily subsidising the provision of water and sanitation services due to them being human rights must be questioned.
It is easy to notice that the value of water in Jordan is largely undervalued, which is mainly contributed to the high subsidies on residential water and wastewater tariffs. The reality is this; people value products and services according to how much they pay for them. Thus, the cheaper the service, the less value it would have in the mind of the consumer. This explains why recently, LED lights and other energy saving technologies have become very popular in Jordan; it is simply because the energy saved affects the electricity bill significantly. Thus, making the investment in such technologies financially viable for the consumer. This change in behaviour towards energy saving is sadly not yet witnessed towards water saving amongst the majority of the Jordanian public.
As long as the true value of water is not conveyed to the residents of Jordan, behaviour change towards water consumption and conservation will not be effectively reached. I believe that in order to effectively induce behavioural change and instantly translate it into actions; a financial approach should be undertaken. The sad reality is that current water tariffs do not only fail in conveying the value of water, it also does not cover the running costs of the water sector; making the sector financially unsustainable and constantly reliant on external funding. Nevertheless, due to the current sensitive socio-economic situation of the country, an overall increase in tariffs is near-impossible to enforce.
There is no doubt that there is a need for a new residential tariff system for both water and sanitation. Presently, the tariff system in Jordan is based on quarterly cumulative volumetric consumption, which is divided into seven quarterly tariff blocks, where each block has its own rate and terms. Since the relationship between water supply and wastewater production is proportional, the wastewater tariff is currently derived as a function of the water tariff as only the water supply is metered.
According to The Ministry of Water and Irrigation the current tariff system does not cover current or future operation and maintenance costs. In 2012, the average cost of water supply was 1.844 JOD/m^3 while the average revenue was estimated at 1.058 JOD/m^3, leaving a deficit of 0.786 JOD/m^3. The current subsidy system on water and sanitation is socially and economically unfair, as it imposes the same subsidy across all social classes. Introducing a new residential tariff system should be able to deliver water while ensuring; cost recovery, economic efficiency, equity and affordability. Therefore, the new tariff system should be tailored to the abilities of different social classes.
A new approach
The new tariff system could be a function of; household income, volumetric water consumption, and the number of residents within a household; a calculated subsidy would then be applied accordingly.
This tariff system would be affordable to all by design, as it takes the household income of each metered house and imposes the water subsidy accordingly. Moreover, since it is also a function of the volumetric consumption, it would encourage all users to change their behaviour towards water and aim at increasing household efficiency by applying different methods of water conservation. Moreover, since the number of residents per household would be known, the expected average water consumption of a house can be accurately estimated based on the water-share of each individual. Consequently, a water consumption benchmark is issued per household; wasteful households relative to the benchmark will receive less subsidies, while efficient households would receive higher subsidies.
In addition, the new tariff system would bring attention to the registration procedures of subsidized household water meters. It is important to link water meters to people; aiming that each resident only receives access to one subsidized water supply source. This means that wealthy families having multiple homes would only receive a subsidy for their “primary home” in which they regularly reside, while the rest of the houses would have an unsubsidized water meter and would be billed respectively. The method of implementing this would be tricky; licensing a water meter would need to be linked to the “Family Book” - “دفتر العائلة “, ensuring that each family has only one subsidized water meter. Moreover, water consumed for luxury purposes such as swimming pools in summer houses would be billed appropriately and fairly.
Finally, water bills should not be billed voluntarily, instead it could be directly charged by the government – similar to income tax – and transferred to utilities. The idea of giving users the water bill and allowing them to voluntarily pay it, only gives leeway for them not to pay it. However, since water is a human right, suspending the service would be a violation against human rights. This leaves water utilities in a very tight corner, where they cannot suspend the service (unlike electricity) and are forced to legally pursue the users until the bills are paid. A shortcut would be billing water users directly from their income, while also providing them with a detailed bill and giving space for complaints. Water equity in addition to a quality service cannot be achieved simultaneously if the tariff structure is not tailored to the financial capabilities of residents and has an almost complete tariff collection.
Conclusion
The end goal is to “Leave no one behind” and fulfil the human right to water and sanitation, which requires the services to be “available, physically accessible, equitably affordable, safe and culturally acceptable”. In reality, this cannot be achieved sustainably in the region if the perception of water value stays the same. Radical approaches must be considered in such circumstances and when considering unique services such as water and sanitation.
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Note from the Author
I do understand that the above proposition would require many public sectors to coordinate, cooperate and share information in order for it to be implemented, which is known to be challenging in Jordan. Moreover, prior to the implementation of such tariff structure, few prerequisites need to be established on a national scale; an accurate estimation of the poverty line in Jordan must be agreed upon and established, upon which water subsidies would be applied. Water theft must be tackled vigorously, in addition to the legal questioning and pursuit of current unpaying users. Once all of this is achieved, the current tariff structure can then begin to shift subtly until it transforms completely. I have not gone into the exact methodology of the implementation of such a system, nor have I analysed the numbers behind it. As this is only an opinion and not based on an official research, I am merely presenting this idea as food for thought. I do aim at studying this topic further and hopefully testing its real feasibility in the current socio-economic context of Jordan.
