Working Paper 18-1

Price and Behavioural Signals to Encourage Household Water Conservation in Temperate Climates

AUTHORS: Liang Lu, David Deller, Morten Hviid 

ABSTRACT: Water scarcity is a global concern. Even in non-drought environments the political and economic costs of developing water resources may favour water  conservation. Using a single high price to constrain demand raises distributional and political challenges. Increasing block tariffs (IBTs) have been proposed as a potential solution, balancing incentives for water conservation with an equitable distribution of costs across households. An alternative approach that may side-step affordability concerns is to use non-price conservation interventions. We survey the literature on IBTs and behavioural interventions (a subset of non-price interventions) to assess their effectiveness, thereby highlighting the operational challenges of implementing effective IBTs. Robust evidence on behavioural interventions is limited, although, social comparisons appear to be effective for conservation. We discuss the implications of the evidence for the UK, a country with a temperate climate. We note that existing interventions have been typically implemented in response to drought situations, so one may question the validity of existing evidence for designing interventions in non-drought situations. We suggest an essential first step before implementing an IBT is research to understand a locality’s water consumers and their water demand. That many UK households have an unmetered water supply presents challenges both for gaining this understanding of demand and producing an evidence base around behavioural interventions.

CITATION: Lu, L, Deller, D & Hviid, M (2018) "Price and Behavioural Signals to Encourage Household Water Conservation in Temperate Climates", CCP Working Paper 18-1

POLICY BRIEF

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