Water has an economic value in all its competing uses and should be recognized as an economic good.
Firstly, it is vital to recognize the basic right of all human beings to have access to clean water and sanitation at an affordable price. Past failure of recognizing the economic value of water has led to wasteful and environmentally damaging uses of the resource. Managing water as an economic good is an important way of achieving an efficient and equitable use as well as encouraging conservation and protection of water resources.
Value and charges are two different things. The value of water in alternative uses is important for the rational allocation of water as a scarce resource whether by regulatory or economic means. Charging (or not charging) for water is an economic instrument to support disadvantaged groups, affect behaviour towards conservation and efficient water usage, provide incentives for demand management, ensure cost recovery and signal consumers’ willingness to pay for additional investments in water services. (GWP 2012d)