Canada has apparently abundant water resources: approximately 7% of the world’s renewable fresh water with less than one percent of its population. Pressure on the resource is growing with annual water withdrawals increasing by almost 90% in the last twenty years leading Canadians to be second highest per capita users of water in the world. Water utility managers want to put into place conservation strategies that will ensure a more sustainable use of available water supplies, particularly, in the face of increasing variability of precipitation arising from climate change. They are increasingly turning to price tools (raising water rates) instead of traditional non-price tools (summer water restrictions) to encourage conservation. However, there is little information on the responsiveness of consumer demands to price changes. Establishing the efficacy of such a tool for curbing water use is one policy problem addressed by this research. A second problem is how to incorporate price responsiveness into the ability to predict future water demands and revenue streams that will support future infrastructure maintenance and improvements.
This research will use data from the Capital Regional District (Victoria, BC), City of Calgary, and City of Guelph to obtain elasticity estimates for residential water demand, as well as to evaluate the effectiveness of non-price conservation methods (summer water restrictions, education programs, subsidies for toilet retrofits, etc.). Using water consumption data from multiple sources allows for better specification of water demand models (both short-run and longer-run, as well as sensitivity to seasonality in the data). This allows the researcher to examine whether price (and income) elasticities of water demand are geographically-environmentally sensitive. Responsiveness of summer and winter water demands to price changes will be separately assessed in order to examine the extent to which consumers are less constrained with respect to outdoor than indoor water adjustments. Ultimately, this information will support better infrastructure and investment decision-making.
This research has resulted in scholarly publications and end-user reports:
- Dupont, D., Bird, J. (April 2014). “Know Your Customer: Canadian Households and Water.” Plain Language Primer.
- Dupont, D. and Renzetti, S. (2013) “Household behaviour related to water conservation.” Water Resources and Economics 4(1): 22–37.
- Renzetti, S. and Dupont, D. 2013. “Buried Treasure: The Economics of Leak Detection and Water Loss Prevention in Ontario” BESRC WP 2013-001.
- Report to Partners “Understanding Water Demand: an Examination of the Capital Regional District Using Census Tract Data.” (2013).
- Dupont, D. and Renzetti, S. (forthcoming) “Water Pricing in Canada: Recent Developments.” Chapter in “Water Pricing Experiences and Innovations” Edited by Ariel Dinar,Víctor Pochat, and Jose Albiac. Springer.
- Renzetti, S., Brandes, O., Dupont, D., MacIntyre-Morris, T., and Stinchcombe, K., (forthcoming) “Using Demand Elasticity as an Alternative Approach to Modelling Future Community Water Demand under a Conservation Oriented Pricing System: An Exploratory Investigation”. Canadian Water Resources Journal.
- Dupont, Diane P. (forthcoming) “Water Conservation: Thinking Beyond the Tap” Section VI. The Handbook of Water Economics edited by A. Dinar and K. Schwabe, Edward Elgar Publishers.
Additionally, this research has been disseminated through several presentations:
- Renzetti, S. and Dupont, D. “Household behaviour related to indoor and outdoor water conservation” presented at the 11th Annual International Water Resource Economics Consortium Meeting, September 7-9, 2014 in Washington, DC
- Carter, B., Dupont, D., Clark, S. (2013). “Using GIS to Predict Residential Water Demand Responses to Water Prices.” Poster presentation at Brock Research Celebration
- Dupont, D. (2013) Invited panelist at the "Blue Economy Initiative - Global Water Challenge" Panel entitled "Options for Action" March 4, 2013, Toronto Board of Trade.
- Dupont, D. (2013). Invited speaker at the Niagara Sustainability Initiative's "Low Carbon Economy" event, February 19, 2013. St. Catharines Club.
- Carter, B. (2012) “Using GIS to Assist in Understanding Residential Water Conservation.” Presentation to Brock’s GIS Day conference.
This research project has held several key end-user oriented meetings and workshops:
- “Water Economics Research in Canada: History and Future Directions” presented to researchers at EAWAG (Swiss Federal Institute of Aquatic Science and Technology), April 29, 2014.
- Major Research Papers from HQPS:
- Clark, Scott. 2012. “Understanding Water Demand: An Examination of the Capital Regional District Using Census Tract Data” (MBE Research Paper)
- Chitsinde, Joashub (Tina), 2013. “An Empirical Investigation into the Distribution Effects of Water Pricing Reform” (MBE Research Paper)
- Strengthened relationships with researchers by providing household level water data to another WEPGN project (Renzetti and Scott) to assist them in examining how water pricing can affect households at different income levels.
- Relationships with project partners have been strengthened through meetings and have resulted in refined understanding of water forecasting needs.