July 6, 2016
"We're all wondering now what's going to happen - are they going to charge us for air?"
Ireland - nicknamed the Emerald Isle for its its lush, green countryside - is a country with abundant water resources, and has had the luxury of not charging its citizens to use that water for most of its history. And as a result, many people in Ireland now view water as a free, ubiquitous right, much like we might think of the air we breathe.
When Ireland introduced water charges for the first time in 2014, the people responded angrily. It was not the cost that offended them, but the principle of charging for something so basic and essential to human life.
Said one opponent, “There is now a widespread understanding that water charges at any rate are unacceptable. They represent the commodification of a vital human need.”
Managing the world’s supply of natural resources amid a growing global population and increasing demand fueled by economic development will be one of the defining political challenges of this century. Governments around the world will need to balance the long-term need to conserve energy, food, water, and minerals with the short-term expediency of satiating public demand for these resources. Much has been written about the role of energy, and in particular gas prices and fuel subsidies, on political stability, but the bigger concern might actually be how to manage food and water resources, not because of economic or logistical differences, but because of psychological differences.
As seen in the Irish experience, people may be more likely to view water and food, particularly staples like rice and bread, as a right instead of a commodity, making the implementation of traditional market-based pricing schemes politically dangerous. It’s not just disgruntled consumers who view water in these terms. When Detroit cut off water to residents who were unable to pay their water bills, the United Nations said, “It is contrary to human rights to disconnect water from people who simply do not have the means to pay their bills.”
From a consequentialist or cost-benefit perspective (read: an economist’s viewpoint), it’s important for finite, non-renewable resources like water and food to have a price signal so users can adjust their consumption according to the marginal utility they receive. But for many people, the idea of turning a sacred, life-sustaining need like water or bread into a commodified, material want violates a sense of normative or deontological ethics about restricting access to that which is their right to have.
This debate over our relationship with natural resources isn’t just restricted to economists and humanists; a long-standing theological debate exists within Catholic Church over this very topic, as well. Many Christians interpret a line in Genesis 1:26 that humankind should have “dominion” over the earth to imply that there’s a God-given right to exploit the earth’s natural resources for human benefit. But in his major encyclical on climate change last year, Pope Francis challenged this interpretation of “dominion” and instead emphasized Genesis 2:15’s reference to the responsibility of humans to “till and keep” the earth, which implies humans must be responsible stewards and sustainable users of the earth’s resources.
In addition to differences in mental models about whether water and bread are a right or a commodity, the challenge of resource management gets into questions of present bias and temporal discounting. For many resources, taking a larger slice of the pie for present-day consumption not only reduces the slice of the pie available for tomorrow, but may actually impact the size of the pie in the future. For example, overfarming and overgrazing at unsustainable rates can contribute to soil erosion, reducing future agricultural productivity. Similarly, overpumping groundwater can lower water tables, permanently reducing future water access and quality.
Political leaders, particularly in low and middle-income countries, face the unenviable choice between ensuring there’s enough food and water for their people today versus ensuring there will be enough left over for their children. Political expediency will always favor present-day consumption and benefit, but at a more personal level, so will human nature. On an individual basis, we are impatient and present-biased, favoring our present-selves over our future-selves. We may rationally acknowledge the importance of conserving water and food today so our children may benefit in the future, but delayed gratification will always be a struggle.
Even if we manage to agree that water and bread are commodities whose consumption must be regulated and our leaders are strong enough to resist the temptations of temporal discounting, the sustainable management of natural resources faces a final hurdle: sharing the pain. One of the biggest challenges for conservation efforts is the perception that others are not doing their part to conserve, as well. The fear that others are free-riding on your conservation efforts reduces your incentive to conserve more, which in turn fuels the perception that not everyone is cooperating on conservation.
This is part of a larger phenomenon called “inequity aversion,” where our utility decreases if we know goods are shared unequally. This is felt when we have more than our neighbors, but it’s even more powerful when our neighbors have more than we do. This is part of the reason why corruption is such a powerful component of food riots, as Evan Fraser and Andrew Rimas point out in Foreign Affairs. They argue that “food riots are ultimately caused more by the perception of profiteering and less by the actual prices on the shelves,” which implies that the frustration is really about the pain is not being equally shared among all members of society. This inequity aversion also explains the particular anger felt in California at celebrities who are not participating in the state’s water conservation efforts. As a result, countries with significant social stratification or a corrupt political system are more likely to face protests and social upheaval when implementing conservation policies or reducing subsidies.
We spend a lot of time thinking about the technical, scientific, and legal issues of managing natural resources, but we often forget about how the person turning on the faucet will react. Reorienting how our brains think about the water we drink or the bread we eat is the first step towards more sustainable resource management, and policies that dismiss this basic psychology of our relationship with these essential resources are doomed to fail.