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Tuesday, April 01, 2008

Water may be the resource that is scarce, but the problem is something else!

I found an article by Sarah Wolfe, and wrote an analytical POV for my Geology course. Because it has to do with Economics-specific points pertaining to the new government of South Africa (new at the time of the article release) and how it would be "FAIR" to the the affluent AND the poorer people of the nation, I found it absolutely pertinent for this course!

Successes and failures of municipal water efficiency initiatives in South Africa contain valuable lessons for North American water purveyors.
By Sarah Wolfe


South Africa had a plethora of problems post-apartheid, but one of the biggest obstacles, had to do with getting water to the people of the nation. This could have been a unifying factor, but only in its basic human necessity aspect, and not as a cultural unifier. Along with a defunct water-supplying infrastructure, South Africa had to juggle other variables that resulted in a new nation comprised of an affluent (primarily white) population and a poor (primarily black) population.

These worlds combined to make a country inundated by urgent problems: a flagging economy based on a defunct social system, a population with high expectations and eager for immediate change, an out-migration of the professional corps because of perceived security problems and economic uncertainty, and a set of environmental conditions that limited the development potential and undermined the majority’s quality of life.[1]

Something like water supply has as much to do with economics as it does with geology. For one thing, water supply can be scarce and when there’s scarcity at play, and people, there will be occurrences of inequity. Another point is that regardless of scientific ingenuity, government can not control natural variables such as wet vs. dry seasons. But in post-apartheid South Africa, and other places, government attempts to deal with those natural variables and to come up with a way of fairly addressing scarcity.
So, with these problems being on the agenda for a new government, the nation experienced two setbacks:

Two situations catalyzed the ANC government’s efforts to give greater attention to water
First, a series of droughts in the early ’90s reinforced the need for immediate action and better,
more long-term decision-making.
Second, the ANC was publicly committed to meeting its citizens’ basic needs. In addition to
education, employment, housing, and health care, these basic needs included the provision of
services to the 14 million people without access to safe drinking water and the 21 million that
lacked reliable sanitation in the rural and informal settlements.
South Africa’s water realities—heavy water use by the agriculture and the mining industries and rapidly escalating requirements because of population increases and urbanization—meant that decision-makers had to think about water management in new ways. (Wolfe)

The “National Water Act of 1998” was the first step in handling the problem of getting good, clean water to the people of South Africa, regardless of social class or race. By developing riparian rights,[2] more efficient uses of the water (according to public sustainability), and rationing, programs and methods were developed to first make a nation that was able to rebuild with a water system in place. The section of government, DWAF[3], was responsible for this aspect. They first used a program that would allocate water in an efficient manner in the Hermanus municipality of South Africa. This proved to only show that the estimates of sufficient supplies would be wrong, and fall way below expected.

The biggest problem had to do with who was using the most water; the affluent portion of the municipality used a LOT more per capita than did the poor and middle-class members of the area. Not to mention that people were moving from rural areas to the urban for job opportunities and the numbers of tourists also weren’t taken into consideration. So, other programs were needed such as environmental education standards in schools, strict enforcement of policies, and the employment of workers who’d specialize in water supply. The approval ratings were very high, but dwindled because of the change in annual precipitation. People were misled to believe that there was less scarcity because of wet years, but then found a rude awakening to the problem during dry years.

People began to do what people do (‘rent-seek’) and use government as a means to find a better position at the cost of someone else. In this case, the program that had done well during wet years, but poorly during dry years would be dismantled and the money earmarked for the program wound up being spent on catering to a wealthy area. This project, intended to help the situation and to contribute towards the betterment of South Africa, fell apart and only made things worse. As Wolfe states:

This South African story highlights the complexity associated with a community-based water conservation and demand management project. The Hermanus case had many successes including the reduced consumption numbers, the delayed infrastructure construction, the economic and social progress through the Working for Water project, the extensive communication campaign, and the international recognition. Even during its “slump,” according to van der Linde, the program was still making a 25% profit from its water revenues.

Problems, however, remained: The social inequity issues were not adequately addressed while the profits made by the WDM program were continuing to be deposited into the municipal general accounts. These funds remained unavailable to program operations or program expansion, including a much needed communications campaign for the new areas of the recently amalgamated municipality.

She then goes on to describe the problem in terms of perpetual ideals. She believes that the engineer behind the demand management issue plaguing South Africa, van der Linde, was onto something, and that the water crisis could be assuaged if only the issue of demand for water could be curbed.

National Water Conservation Campaign’s main focus was on “changing the ethos of water management in South Africa away from a purely supply management paradigm to a demand management approach.” (Van

Unfortunately, changing demand is a process that is hard to track because it may work for some, but not for others. As well, the varying levels of change will be considerably inconsistent between those it does change for. So how can there be sufficient changes made and measured in demand? Perhaps attempting to change demand can be compared to attempting to change people’s preferences which is hard to do without incentives. In economics, it’s called free-rider behavior when the marginal social impact can include a variety of individuals who don’t change what-so-ever (free-ride) thus skewing the measurements of en-masse determinations of effectiveness. This doesn’t address the problem.

So, what’s the problem? If the program is operating in an efficient manner, though enduring setbacks during dry years, why does the program not work? In a simple answer, it doesn’t work because people can’t predict the weather, and when times are rough, dry seasons, people will exercise their strengths to get what they perceive to be their needs met even when it means that others will suffer. From an economics stand point, there are 2 normative views that are clashing. One is that government ought not to attempt assuming absolute understanding of the forces of nature and thus apply a numerical value to per-capita usage, but rather privatized suppliers of water should determine a price and thus efficiency will emerge. The second is that basic human necessities, such as water, ought not be privatized because of price-gouging tendencies and potential for monopolies to occur and cause harm to people who may not be able to afford the emerged prices of water and other ‘basic sustainability resources.’

So, what’s the solution? Perhaps, if the consumption of water is causing the scarcity (which it is) then there can be a role for government to play. Government can act as the monopoly of supplying water, and impose a consumption tax on it. Government would serve to prevent profit-hungry entities from gouging consumers’ basic human needs, while also limiting the consumption by attaching a value to the water usage. That way, the rich who may be wasteful with water, would being paying for means that may cause an increase in water supply, whether through converting sea water into potable water, or damming, or any variety of expensive means of accessing water.

[1] Successes and failures of municipal water efficiency initiatives in South Africa contain valuable lessons for North American water purveyors. By Sarah Wolfe

[2] According to legal-explanations.com, “(n) Riparian Rights are the inherent right an owner of a landed property situated in the banks of a river or collection of water have, to use the water in the river, ponds etc for the irrigation purpose or for consumption, subject to the rules existing in that state.”

[3] Department of Water Affairs and Forestry

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