IMF Warns Underpricing Water Is Fostering Shortages By Ian Tally, The Wall Street Journal

June 9, 2015

IMF Warns that water is underpriced globally, fostering shortages.

The International Monetary Fund has already declared the world isn’t paying enough to emit greenhouse gases and energy consumption.  Now it is worried that water isn’t priced right either.

Governments should be charging consumers higher prices to encourage more sustainable water use and improve access for the poor, the IMF says in its latest staff discussion note. The IMF typically steers clear of issues its sister institution, the World Bank, manages as part of its development mandate. But the world’s emergency lender said the issue is worth the IMF wading into because water challenges affect economic growth and public finances, particularly as amid shortages.

“The IMF can—and should—play a helpful role in ensuring that macroeconomic policies are conducive to sound water management,” the fund economists argue. And, as California’s drought has highlighted in recent months, water isn’t just a developing-country issue.