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Demand management

Demand management (DM) of water resources is the alternative to supply augmentation, the prevailing policy in many countries until recently. In countries or regions facing implacable hydrological limits, DM recognises water scarcity as a fact of life and creates the conditions in which users can appreciate its real value. By making better use of the resource, DM obviates the need for costly new investments, and avoids the environmental disturbance inherent in many new supply schemes. DM has various themes: losses and waste reduction, economy in use, the development of water-efficient methods and appliances, creation of incentives for more careful use of the resource, improved cost recovery, reallocation from low- to high-value uses, devolving responsibility from central government, greater use of economic instruments (prices and markets). DM typically includes measures to relate the value of water to the cost of its provision, and thereby motivate consumers to adjust their usage. DM entails treating water more like an economic resource, as opposed to an automatic public service. Introducing DM involves action at three, mutually reinforcing, levels: creating enabling conditions through government policies; specific incentives for water users; and the implementation of projects and programmes in such areas as leak detection, canal lining, and wastewater recycling.

Further information: Managing Water as an Economic Resource, ODI, 1991. Water: Economics, Management and Demand.ICID, 1997.

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