Introduction
One of the most valuable resources that we have is water. Water is an essential requirement we need to sustain life. All plants, animals, and humans need water for them to survive.
Valuing water is not new; however, it can present challenges — one of them being how to use water properly. It is giving value to the water: water valuation. The context of the phrase “Water Valuation” is the benefit that people are having when they use it. It is the context that talks about the use of water and all the different alternatives for use.
Australia is a country benefited by water — surrounded by water environments such as rivers, lakes, estuaries, and coasts. Water in Australia has been critical in Australia’s history and is a continual monitoring process for the Australian Government and the community. Numerous articles are published regarding this problem, some stating that cities are exceeding their capacity to rely on rainfall to serve as drinking water.
How valuing water occurs in Australia
We all need water, yet not all places have enough water resources to be used — just like Australia, which caused the government of Australia to take action. The government in Australia has an administrative process for water resource planning, where high-level decision making takes place about how water is disseminated or shared among users and jurisdictions. This includes implementing different rules on determining how water will be used by hydropower generation, agriculture, urban use, flood protection, transportation, and environmental protection.
Water Productivity
Water productivity is how much water is used to produce any given output, considered as production. For small businesses or individual businesses, water productivity can be influenced by factors such as wastage, leakage and evaporation. An example is a farm business that grows a crop using drip irrigation — it is likely to have greater water productivity than one that grows the same crop using old irrigation. This productivity is sometimes referred to as technical efficiency since it concerns the amount of the desired output that can be produced using a given quantity of input.
Allocative Efficiency
Economically speaking, it is possible to identify a type of water efficiency which can be linked to how well water is devoted to different industrial uses. Allocative efficiency is achieved when it is not possible to increase the value-added for the economy as a whole by transferring water from one activity to another. Conversely, if the water is not being used in an allocatively efficient way, then it is possible to improve economic outcomes by transferring water to uses where it can make a relatively bigger contribution to Gross Domestic Product (GDP) of the economy.
Price of Pollution
Pricing pollution allows value to be taken into account by forcing contributors to pollution to consider the negative value (i.e. costs) of surface and groundwater degradation. This has often been achieved by starting permitting regimes for wastewater discharge where the permit price is administratively determined. Cap and trade or property rights approaches have also been used to establish a market-determined price for pollution (or water quality), with governments allocating wastewater discharge permits and then allowing the trade of the permits under the cap. Additionally, payments for ecosystem services (PES) encourage landowners to consider the impacts of their actions on the downstream value delivered by ecosystems.
Benefits of Valuing Water
Aside from drinking it to live, people have many other uses for water, including:
- Cooking
- Washing their bodies
- Washing clothes
- Cooking and eating utensils; such as billies, saucepans, crockery and cutlery
- Keeping houses and communities clean; recreation such as swimming pools; keeping plants alive in gardens and parks
- Water is a necessity for the healthy growth of farm crops and farm stock and is used in manufacturing many products
Economic values
Water is used in producing most goods and products. Water resources are critical to irrigated agriculture, mining, households, and many more industries. The largest amount of water use is for irrigated agriculture, producing food and fibres (such as cotton).
Values of household water use
Good and clean water for drinking, washing, and cooking is essential to sustain life. The values inherent in domestic water go well beyond its cost and quality, as revealed by community reactions to the option of using recycled water for human consumption. Recycling wastewater or stormwater is a technically viable and cost-effective solution for urban water supply. The closer the use gets to direct human contact, the less acceptable recycled water becomes. It is more bearable for uses such as toilet flushing and open space irrigation, less acceptable for growing fruit and vegetables that are consumed directly. The least socially acceptable is water for drinking and personal hygiene.
Environmental water values
Water-dependent ecosystems provide a myriad of ecosystem services of indirect economic value. Water ecosystems provide things such as refining waste and keeping water clean, or providing biodiversity as genetic capital for future applications. Costs for humans providing the services (such as treatment of water quality) might be much higher if the ecosystem services were not maintained. With that, a monetary value to people can be placed on the ecosystem services provided. A highly influential analysis of global ecosystem services showed that ecosystems provided at least as much value to the economy as the human production of goods and services.
Indigenous values
Indigenous Australia connects deeply to water ecosystems. They consider water to be a sacred and elemental source and symbol of life, which has supported watershed communities for thousands of years and governed Indigenous peoples’ relationships with each other and the country.
As we have unpacked here in this post, the value of water is complex as different views are shared across different industries, organisations, communities and government.
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