Water Pricing Doesn't Match Its Value As Limited Resource : Planet Money : The Indicator from Planet Money As we grapple with the climate crisis, there's less and less water to go around. But in the U.S. water is cheaper than dirt. Today on the show, the reason we're willing to flush something so valuable down the drain.

Water's Cheap... Should It Be?

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

SALLY HERSHIPS, HOST:

All this week, we are talking about water or the lack of it. The climate crisis means intense heat, drier weather and drought, and today at least one uncontained fire, which is causing evacuations in Lake Tahoe. And California and Nevada have both declared a state of emergency. But despite these extreme consequences from water scarcity, often, we do not seem to treat this incredibly valuable commodity with the respect it deserves.

ROBERT GLENNON: The water for your flush toilet is something you could actually drink.

HERSHIPS: You mean the water before we flush it down the toilet?

GLENNON: Well, no - before you poop in it.

DARIAN WOODS, BYLINE: That makes a lot of sense.

(LAUGHTER)

WOODS: Robert Glennon is a professor emeritus at the University of Arizona. He's a water expert, and he's the author of "Unquenchable: America's Water Crisis."

And today, we're going to be exploring the nonchalant way that we have priced water in America. This precious resource has been treated and tested and piped all the way into our bathrooms. And then, you know what happens next.

HERSHIPS: No, Darian (laughter). What happens next?

WOODS: We just completely desecrate this precious commodity, Sally.

HERSHIPS: Oh, God. I guess it is kind of like if we were flushing, like, gold or diamonds down the toilet.

WOODS: Yeah, that's a good analogy.

HERSHIPS: It's a nicer image.

WOODS: Yeah.

(SOUNDBITE OF MUSIC)

HERSHIPS: I'm Sally Herships, in for Stacey Vanek Smith.

WOODS: And I'm Darian Woods. This is THE INDICATOR FROM PLANET MONEY. Today on the show, what happens when a precious commodity - water - is not priced as one?

(SOUNDBITE OF MUSIC)

HERSHIPS: Warning, everybody - we are heading back to the bathroom, and that is because flush toilets are responsible for 30% of all the water we use in our homes. They are the single biggest water uses in our houses - 2 trillion gallons of water a year. And here, I just want to reiterate that the water you use to flush your toilet is actually clean enough to drink.

So we're using, like, the cleanest thing to get rid of the dirtiest thing, like this high-quality product, which is kind of crazy when you think about it.

GLENNON: Yes. Yes.

HERSHIPS: (Laughter).

GLENNON: Exactly. You got it. It's absolutely insane.

HERSHIPS: (Laughter) Your eyes are getting really big.

GLENNON: It's insane. So what's the biggest waste of water in the United States? I would say it's the flush toilet. And now I'm going to just become completely unglued.

WOODS: According to the Environmental Protection Agency, the average American uses around 88 gallons of water per day, per person. But, at the same time, we pay less than a penny per gallon.

GLENNON: No, we're not paying for anything. That's one of the big problems in water. You're not paying anything for water. You may have a bill from a water department, or there may be something from your condo, your apartment association - or not. I mean, water is so undervalued that, in many places, people don't even - landlords don't even try to collect it from individual units.

HERSHIPS: For context, Robert says bottled water can cost up to a thousand times more than tap. And, fun fact, 25% of the time, bottled water is tap water. And to confuse things even more, Robert says in apartment buildings, often, there's just one meter for the whole building. So, Darian, you could turn your tap on and leave it on for, like, a month, and there's another problem.

GLENNON: Even your landlord, who's paying the ultimate bill - your landlord is simply paying for the utility to provide clean water. It's the cost of service. There's no premium added for the water itself.

WOODS: Robert says imagine you're going to the gas station, and you don't have to pay for the actual gas, just the cost of the pumping. That's what we have going on with our water. And because we've underpriced this precious resource so much, we've got this whole other set of water problems on our hands. One of them is leaks. According to a study from Stanford University, we lose an estimated 20% to 50% of our water every year in the U.S. from leaks. And in a place where water is scarce, like much of the West, that can be an expensive loss.

HERSHIPS: Yeah. And at the same time, a lot of our municipal pipes and water systems are decades, even a hundred years old. And looking for leaks and repairing old pipes, it is kind of like the flossing of infrastructure. Everybody knows they should be doing it, but often they don't.

WOODS: Twice a day, I promise.

HERSHIPS: (Laughter).

WOODS: But water pricing can be really complicated. The rules and the regulations around water ownership in the U.S. are pretty cumbersome, so much so that the transaction costs are immense. And Robert says that all these rules and regulations just get in the way of a clear price signal for water.

HERSHIPS: And as a result of all of this, for us everyday water users, there is no market pressure at work. And that has a really expensive result.

GLENNON: We never think about water. We turn on the tap, and out comes as much water as we want for less than we pay for cellphone service or cable television. When many Americans think about water, they think of it as the air, as infinite and inexhaustible, when, for all practical purposes, it's quite finite and very exhaustible.

WOODS: Why take fresh water out of a river when you can clean and reuse the water you already have? I mean, yes, he's talking about the water we flush down the toilet, but also the water from our showers and our kitchen sinks. Still, without people facing high prices to impel them to be better conservationists, it could be a tough sell.

GLENNON: People don't tend to want to think too much about that, Sally.

HERSHIPS: (Laughter) Right.

GLENNON: But the technology is there to clean up water.

HERSHIPS: And just FYI, that technology has been around for decades. We just have had trouble with the perceived yuck factor. In the meantime, there may be some good news. Just recently, Robert says Salesforce, the tech company, started recycling water at a building in San Francisco. It collects the water from faucets and sinks and also what is called blackwater.

WOODS: It sounds ominous. Do I really want to know what blackwater is?

HERSHIPS: It really depends. Darian, do you care about the environment?

WOODS: Yes.

(LAUGHTER)

HERSHIPS: Blackwater is the water we flush down our toilets. And at this building, it gets reused for things, like drip irrigation systems and flushing other toilets. Robert says reusing blackwater would be great for massive server farms and power plants.

WOODS: A couple of years ago, Los Angeles announced that they would take water from one of their big treatment plants and reuse it. And water is recycled around the world already. It's been happening for years in countries like Israel, Namibia, Singapore and also in the U.S. But here, it's only a tiny fraction of the wastewater that we produce. So, in the meantime, if you're in the U.S. and really dedicated to conserving more water, there are steps you can take, like installing an incinerating toilet.

HERSHIPS: I'm sorry - an incinerating toilet sounds like something out of "Harry Potter," where you go into an outhouse, use the bathroom and then, poof (laughter).

GLENNON: Pretty much. Yeah. Only it's - you don't - it's not an outhouse. It's your house - it's your bathroom in your house.

HERSHIPS: Bathroom magic.

WOODS: Yeah. I mean, it sounds like a fire risk, but I'm rolling with it. An incinerating toilet is not hooked up to water. It uses electricity or gas, and it burns your waste, turning it into a pile of ash. A web post from the Barnstable, Mass., Department of Health and the Environment says that these toilets, quote, "give new meaning to the expression hot stuff," end quote.

HERSHIPS: Ba dum bum (ph).

WOODS: And there are also composting toilets, where your waste is composted, just like in a garden, but, you know, different. You add in some dry material, like sawdust or moss, and your waste is composted.

GLENNON: You do have some people in urban areas that have just said, this is nonsense. I'm going to put in a composting toilet - even though they have regular toilet. They are unusual people. You know, my hat's off to them.

HERSHIPS: OK. We may be laughing at all of these special kinds of toilets. But to be fair, they don't need water to work, and the harsh reality is that we have a really serious scarcity problem.

WOODS: Yeah. Robert says we need conservation. We need to reuse water, and we need market pressure for water to be valued at its true worth. He says what he's argued for is encouraging a water market with government oversight. But, Sally, if water is priced correctly, I mean, I imagine there will be some people who can't afford it.

HERSHIPS: Well, here's Robert's argument. He says there are already millions of Americans who don't have access to water, but if we start charging more - and for the water itself and not just the service - it would help us to stop abusing water and wasting it. And, hopefully, we would have enough for everyone.

(SOUNDBITE OF ARCHIVED RECORDING)

WOODS: And speaking about wasting water, tomorrow, we're going to be looking at how green, beautiful lawns and golf courses are in the desert. That's growth American-style.

HERSHIPS: In the meantime, stay hydrated.

This episode of THE INDICATOR was produced by Julia Ritchey with help from James Willetts (ph). It was fact-checked by Kaitlyn Nicholas (ph). THE INDICATOR is edited by Kate Concannon and is a production of NPR.

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