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Water conservation remains a critical issue worldwide, especially as the gap between demand and supply continues to widen. This problem is particularly urgent in urban centers of rapidly growing regions, such as the Global South. Despite large infrastructure projects designed to improve access to water, many cities in countries like India still suffer from severe water shortages. Meeting Sustainable Development Goal 6 (SDG6), which focuses on ensuring availability and sustainable management of water, will require an unprecedented increase in conservation efforts, both globally and locally.
Marginal pricing, where consumers are charged based on the volume of water they use, has long been the preferred method to reduce water consumption. However, recent studies suggest that non-price interventions may also be effective and could play an important role in addressing the water conservation crisis. A recent paper ‘Combining price and non-price interventions for water conservation’ explores the potential of combining both price and non-price interventions for water conservation based on long-term field experiments conducted in India.
Bengaluru, India’s rapidly urbanising technology hub, has been grappling with acute water shortages. While some affluent communities enjoy uninterrupted water supply due to private distribution networks, much of the city suffers from water scarcity. Inadequate public infrastructure leads to unequal access to clean water. Addressing these challenges requires innovative solutions that go beyond infrastructure projects and include changes in household behaviour.
Historically, marginal pricing has been the primary mechanism to incentivise reduced water usage. However, this approach is not without its limitations. While marginal pricing can lead to aggregate reductions in water use, it may also inadvertently cause some households to increase consumption due to complex behavioural responses. Moreover, price alone may not be enough to drive long-term, sustained behaviour change, especially in affluent households where the cost of water may not significantly affect spending patterns.
Non-price interventions, which focus on behavioural changes through education, nudges, and social comparisons, have gained attention as a complementary or alternative method. However, there is limited research comparing the efficacy of price and non-price interventions, particularly in affluent communities where water use is disproportionately high.
Field experiment: Combining price and non-price interventions
To address the gap in understanding the relative effectiveness of price and non-price interventions, a field experiment was conducted in an affluent gated condominium community in Bengaluru. The experiment involved over 120 households, with water consumption data collected over a period of three years. The unique setting allowed researchers to measure water use both before and after the introduction of marginal pricing, as well as after a non-price intervention aimed at encouraging water conservation.
The non-price intervention involved weekly reports sent to households detailing their water usage, along with conservation tips and social comparison data that showed how their consumption compared to the median household in the community. This behavioural intervention was designed using a theoretically grounded habit-change framework, which aimed to motivate residents to adopt long-term conservation behaviours.
The price intervention, introduced after the non-price intervention, involved the implementation of volumetric pricing for water, where households were billed quarterly based on their water usage. The price structure used an increasing block tariff, meaning that higher levels of water consumption were charged at progressively higher rates.
Results: The relative efficacy of price and non-price interventions
The results of the field experiment reveal that both price and non-price interventions were effective in reducing water consumption, but the non-price intervention had a significantly larger impact. Households that received the non-price intervention reduced their water use by an average of 33%, compared to an 8% reduction for households that only experienced the price intervention. Importantly, the study found that the combination of both interventions led to the most consistent and persistent reductions in water use.
While the average price effect resulted in an overall reduction in water use, a significant portion of households increased their water consumption after the price intervention was introduced. This adverse reaction highlights the complexity of using price as a tool for conservation, as some households may interpret the introduction of a price signal as a justification for higher consumption. This response is similar to the "rebound effect" observed in other environmental policies, where improvements in efficiency or pricing can lead to increased resource use due to changes in consumer behaviour.
On the other hand, the non-price intervention had a more uniformly positive impact. By focusing on changing household habits and providing regular feedback on water usage, the non-price intervention was able to create lasting changes in behaviour. The social comparison aspect of the intervention, where households could see how their consumption compared to others, was particularly effective in motivating lower water use.
Heterogeneity in household responses
One of the most important findings of the study was the heterogeneity in household responses to both interventions. The study found that only a small percentage of households were responsible for most of the water savings, while others either increased their consumption or made only minimal changes. Specifically, 12% of households accounted for nearly all of the aggregate reduction in water use, while 21% of households actually increased their water use after the introduction of pricing.
This variation in responses underscores the importance of understanding the underlying factors that drive household behaviour. The study identified several key household characteristics that influenced the effectiveness of the interventions, including attitudes toward water conservation, home ownership status, and baseline water usage. Households with strong pre-existing conservation habits were more likely to respond positively to both interventions, while those with weaker habits or lower pro-environmental attitudes were less responsive.
The study also found that tenants, who may have less control over structural changes to their homes, responded particularly well to the non-price intervention. This suggests that non-price interventions may be especially effective in situations where households face structural barriers to conservation, such as a lack of control over appliances or plumbing fixtures.
Discussion: The case for combining price and non-price interventions
The findings of this study provide strong evidence that combining price and non-price interventions can lead to greater and more persistent water conservation outcomes than either approach alone. While price signals can create economic incentives for reducing water use, non-price interventions are more effective at addressing the behavioural and psychological factors that influence household decisions.
One of the key advantages of non-price interventions is their ability to create lasting changes in household habits. By focusing on education, social norms, and regular feedback, non-price interventions can help households internalise conservation behaviours and continue reducing water use even after the intervention ends. This is in contrast to price interventions, which may only have short-term effects and can be subject to adverse behavioural responses.
However, the study also highlights the challenges of designing effective price interventions. The fact that some households increased their water use after the introduction of pricing suggests that price alone is not always sufficient to encourage conservation. To address this, policymakers should consider combining price interventions with non-price strategies that target the underlying behavioural factors driving water consumption.
Conclusion
Water conservation is a complex challenge that requires a multi-faceted approach. The findings of this field experiment suggest that combining price and non-price interventions can lead to greater and more sustained reductions in water use, particularly in affluent communities where water consumption is high. By integrating both economic incentives and behavioural strategies, policymakers can address the structural and agentic barriers to water conservation and create a more sustainable future.
To scale these findings, further research is needed to explore how these interventions can be applied in different contexts, including lower-income communities and regions with varying levels of water scarcity. Additionally, future studies should investigate how to optimise the design of non-price interventions to maximise their impact and how to overcome the potential adverse effects of price signals. Ultimately, a combination of both approaches offers the best hope for achieving meaningful progress toward global water conservation goals.
Citation Vivek Vivek et al 2024 Environ. Res. Lett. 19 104066DOI 10.1088/1748-9326/ad747b