Wednesday 9 November 2011

Paying for water

THE FLOODS last month may have prompted the knee-jerk response that Ireland has a surfeit of water, so why should the Government charge for it?

It must be recognised, however, that treating water for human consumption is an expensive business and that much of the water we use is wasted – primarily because it is perceived as a “free” resource. Just as many people discovered the value of recycling when charges were imposed on household waste, charges for water consumption should – at least in theory – provide a real incentive for conservation, in line with a broader definition of the “polluter pays” principle.

But what the Government is planning to do is to impose a flat-rate levy on all households, irrespective of whether they use water wisely or profligately. Minister for the Environment Phil Hogan argues that this is necessary in the short term to raise extra revenue pending the installation of water meters in every one of Ireland’s 1.4 million homes – a mammoth task that could take several years. It is also likely to run into opposition from those who see water charges as a form of “double taxation”; the Socialist Party has pledged to lead a “mass campaign of civil disobedience” against any water charges and, one may presume, the installation of meters.

An assessment of our water sector by PricewaterhouseCoopers found that there were no consistent policies, no standards, no consumer protection and no economic regulation as well as fragmented leadership, poor co-ordination and duplication of management. But it also highlighted some strengths, notably the fact that local authorities are accountable, close to their consumer base and can mobilise resources in time of need. One wonders what the Government’s plan to replace them with a central body, Irish Water, will mean in terms of rapid response to local emergencies.

Writing in The Irish Times last August, the ESRI’s Richard Tol argued correctly that a flat water charge would be unfair and, once introduced, it “may be with us for a long time”. Rather than relying on Irish Water, “a company that does not yet exist”, to oversee the installation of water meters at an overall cost of more than €1 billion, Tol made a modest proposal that householders could have meters installed much more cheaply themselves and recoup their investment by getting vouchers for free water.

Given the parlous state of the public finances, this proposal is surely worth considering.

Irish Times

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