Similarly, a report by the International Food Policy Resource Institute found that after price reforms were implemented in Chile, the average amount of water people used for irrigation decreased by nearly 26 percent.
Greater efficiency of water use for agriculture alone could have large implications for future water consumption. According to the United Nations Food and Agriculture Organization, more than 8 billion people will inhabit the earth by the year 2030, requiring 60 percent more food than today.
The Economics of Water
Incorporating the full economic costs of water into social services requires more effective pricing mechanisms and clearer policies on water rights and access, among other things.
In some cases pricing mechanisms are misguided. In Costa Rica for example, farmers pay for water based not on the amount they actually use but on the number of acres they water. "The farmers have no incentive to invest in efficient water use," Echeverria noted.
Conflicts over cross-boundary water sources are increasingly a problem, especially in the arid Middle East.
Despite these challenges, "There are successful examples out there of how increasing people's awareness of the economic value of water to encourage conservation can be done, and that it does work," said Carmen Revenga, a co-author of the World Resources report.
One notable success story is the Working for Water program in South Africa. The country has shifted from a flat rate for water fees to a system in which people who save water pay less. A "block-terrace" pricing system gives poor people greater access to water at a lower cost, while high-end users pay more.
"We need to think 'economy,'" said Echeverria. "There can be enough for everyone if we give water, the source of life, the value it deserves."
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