Management of Water Supplies

Water is a shared resource and management of shared resources has a basic problem, the lack of a market mechanism to signal water scarcity. In a free market, scarcity is normally communicated by rising prices. As the cost increases, resources are treated with increasing respect and are conserved wherever possible. Markets do not function, however, unless there are clear property rights in the resources to be exchanged. This is easier to do for land than for water, because parcels of land can be readily identified and stay in place. As a result, land markets are common in many countries. When land is sold, landowners reap the benefits of good land management in higher prices or pay the penalty of bad management in lower prices. In this way, markets signal land scarcity and give farmers the incentive to adopt land-conserving technologies.

Water, however, is a transient resource. As it moves, the same water can be used again and again, with none of the individuals having exclusive rights to it. Since ownership means exclusive use, water markets are poorly developed. Most irrigation water in New Zealand, for example, was obtained with public subsidies. When farmers paid for it at all, it was usually much less than the value of the water measured by its scarcity.

Farmers had, therefore, little incentive to adopt water-saving technologies because these were often more expensive to install than the amount of money the farmer might save by conserving water. Water subsidies are considered traditional rights. Making people pay an unsubsidised price for water use would be highly unpopular. The challenge to the community is to design water use policies that have the needed signal of water scarcity without provoking conflict.

Water use and quality is regulated by a number of government agencies, local councils and, more recently, by corporations such as Watercare Services in Auckland. All these groups have differing views of water quality and water use. Watersheds, for example, may involve forestry, mining, agriculture, power generation, road building, parks, conservation, and water distribution agencies.

New Zealand has integrated these many diverging interests with the Resource Management Act of 1991. New Zealand is also experimenting with the idea of tradable water rights for farmers and industries to establish market indicators for scarcity. In most cities, water is now metered and consumers pay by the litre for their water use.

People wishing to take water out of streams, rivers or aquifers or discharge wastes into waterways, must apply for permits and comply with certain standards in accordance with the Resource Management Act.

Monitoring water supplies

New Zealand has numerous scientific bodies that assist in monitoring water quality. The New Zealand National Institute for Water and Atmospheric Research (NIWAR) monitors 77 sites and publishes information on flow, water temperature, dissolved oxygen, clarity, pH, turbidity, conductivity, biochemical oxygen demand, and trace elements (Statistics New Zealand 1993).

The Councils and companies that supply water and treat waste water have water quality testing laboratories that conduct continual testing of water quality being provided to the community and of the effluent from sewage treatment facilities. They also monitor supplies, pumping rates, reservoir levels, and a variety of other parameters to keep the water supply safe.

Despite all the research, hard data over a number of years is unavailable on the vast majority of New Zealand waterways. There has been, for example, very little testing of water samples for toxic substances such as agricultural chemicals.

The Ministry for the Environment is developing water quality standards and monitoring procedures that can be used by local communities to evaluate the health of rivers and lakes. These will be important contributions to the Agenda 21 process of empowering local peoples to safeguard their own water supplies and the health of inland waters.

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