Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53372 
Year of Publication: 
2008
Series/Report no.: 
Nota di Lavoro No. 66.2008
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
Urban water conservation is typically achieved through prescriptive regulations, including the rationing of water for particular uses and requirements for the installation of particular technologies. A significant shift has occurred in pollution control regulations toward market-based policies in recent decades. We offer an analysis of the relative merits of market-based and prescriptive approaches to water conservation, where prices have rarely been used to allocate scarce supplies. The analysis emphasizes the emerging theoretical and empirical evidence that using prices to manage water demand is more cost-effective than implementing non-price conservation programs, similar to results for pollution control in earlier decades. Price-based approaches also have advantages in terms of monitoring and enforcement. In terms of predictability and equity, neither policy instrument has an inherent advantage over the other. As in any policy context, political considerations are important.
Subjects: 
Cost-effectiveness
Water Conservation
Market-based Approaches
Policy Instrument Choice
Water Price
JEL: 
Q25
Q28
Q58
L95
Document Type: 
Working Paper

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