Droughts can make water unaffordable for low-income households

In water-scarce regions, droughts pose a critical challenge to urban water security for low-income households. Droughts reduce water availability, forcing water providers to invest in additional supplies or implement costly short-term emergency measures.

According to a recent study by Stanford University’s Fletcher Lab, published in Nature Water, these measures can disproportionately affect low-income households’ water bills, making water more expensive for the most vulnerable.

“A low-income household often has a different response to restriction measures and surcharges because of the amount of water they used before the drought,” said Benjamin Rachunok, who did the work as a postdoctoral researcher at Stanford and is now an assistant professor at North Carolina State University.

“This can lead to different affordability outcomes for low- and high-income people, even if the same processes and policies apply to everyone.”

Benjamin Rachunok

Modelling the response to drought

Drawing on publicly available data from the 2011-2017 drought in California, the researchers built a model to examine how different combinations of drought duration and severity, various resilience strategies, and household behaviour can affect water affordability.

“The standard way of thinking about the connection between water scarcity and affordability has been to look at the cost of providing water and how that cost is passed on to users through rate design,” said Sarah Fletcher, lead author of the article and assistant professor of civil and environmental engineering at Stanford Engineering and the Stanford Doerr School of Sustainability. “But to fully understand the impacts of drought on water affordability, we need to include people’s behavioural responses to how the drought unfolds and the restrictions that are put in place.”

When there is a shortage of water, providers often ask consumers to reduce their water use, while adding a drought surcharge to bills to make up for lost revenue. Fletcher and Rachunok found that high-income households can cut significantly, lowering their average water bill, even with the addition of a surcharge.

However, low-income households tend to have less flexibility in water use. Even when they can reduce their water usage, the reduction is not worth the added cost of the surcharge.

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Water companies can also invest in infrastructure, such as desalination or water recycling plants, to increase their water supply. The model showed that in all drought scenarios, these projects increase costs and reduce affordability for low-income households.

Affordability is a key part of access to water,” Fletcher said. “If we think of water security as including affordability for low-income populations, then some of the expensive technological measures we often consider could actually harm water security by making water unaffordable for large numbers of people”.

An affordable future

Water is generally considered affordable when it does not exceed 2-4% of a household’s income. While the cost of supplying water is the main driver of water bills, even a small increase in bills during droughts could make it difficult for some households to pay for the water they need.

By providing insight into the mechanisms that affect affordability, Fletcher and Rachunok hope to help cities evaluate different approaches to long-term water supply planning. They continue to investigate how fee structures and other drought management techniques affect people’s behaviour and are working to develop a generalized approach to help regulators make the best decisions for an uncertain future.

“We have a changing climate and changing water needs,” Fletcher said. “We have to develop approaches that allow us to robustly adapt so that we can still have water systems that are reliable, cost-effective, and provide all the services that we need. And we really should focus on the needs of vulnerable communities as we do that adaptation”.

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