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Tuesday, October 22, 2013
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Introduction to Metering: Spotlight on Chile

By Guest Author, Rachel Lipstein, Yale College '15

Superstorms and costal flooding may grab headlines, but water scarcity is emerging as our most immediate environmental concern. The Intergovernmental Panel on Climate Change’s recent assessment highlights the increasing risk of water scarcity in this age of climate extremes and skyrocketing populations. Another recent study finds that if, by the end of the century, 500 million people are subjected to water scarcity, it will be the result of an optimistic warming scenario. Even now, the droughts plaguing many of the world’s most arid regions—including parts of western United States—are contributing to economic fragility and social unrest.

Water meters, small devices that track water usage, could play a key role in helping people understand the reality of water as a limited resource. Because they allow utilities to bill by volume, meters encourage customers to conserve—often with dramatic results. In the upcoming series, we will examine metering's effect on water consumption, its intersection with cultural norms and individual rights, and its impact on communities. 

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In urban areas of Chile, people know exactly how much water they use. The country’s regulatory agency pegged average usage in 2009 at 44.9 gallons per capita per day, nearly half the United States’ average consumption. They know with such a high degree of certainty because 96 percent of households across the country—100 percent in urban areas—have water meters, small devices that track consumption. Meters allow for volumetric billing, charging consumers for the water they actually use, which encourages them to pay attention to how long they run the tap.

Outside of Chile, where meters are sparse or nonexistent, households pay for water at a flat rate, which encourages users to ignore how long they run the tap. With flat rates, lower-volume users subsidize higher-volume users, and neither has an incentive to curb consumption.

Urban Chileans pay for water by the cubic meter. The more they use, the more they pay. Poor Chileans are protected by a direct subsidy that has money going directly into citizens’ pockets to help pay the bills. To maintain fairness and equity, and to ensure that utilities charge a fair rate, tariffs are set by an independent regulatory body.

Despite success stories like the one in Chile, many countries have been slow to accept meters. Chile has a remarkable degree of meter coverage, particularly for Latin America (according to the World Bank). For the sake of comparison, Ireland hovers just above 0 percent. For most countries without a history of utility centralization and regulation, such as the United States, metering policy may vary widely from region to region. It seems high levels of development or GDP are no indicator of coverage.

Chile’s exceptional performance is a result of a series of transitions that began with a 1974 military coup headed by Augusto Pinochet. As a component of sweeping centralization, Pinochet implemented a national public water and sanitation company, extending coverage dramatically through the 1970s and 1980s. Meters were installed in most new connections, paving the way for a mandatory metering policy.

After the 1988 transition to democracy, Chile adopted a spate of laws that divided the national company into several public and private corporations. Mandatory metering was implemented, and a powerful state regulatory agency was established to oversee it all. New progressive policies ensured that no household spent more than 5 percent of its average monthly income on water and sanitation. While customers have an incentive to conserve water, no one is denied access due to price. Utilities are incentivized to maintain good quality water and reliable systems.

Chile, the UN’s Economic Commission for Latin America and the Caribbean reported, has created the perfect public-private model. Privatization has increased in recent years, accompanied by a private service provision that maximizes efficiency and quality. Meanwhile, an autonomous public regulator ensures fair prices and equitable service. [1][2]

Bolivia is a counterpoint to Chile’s success. In 1997 and 1999, the government awarded two major contracts to foreign private utilities, granting them the right to provide water in La Paz and Cochabamba. These contracts resulted in skyrocketing prices and water cut-offs, along with mandatory meters. Multi-city riots ensued in a conflict known as the Cochabamba water wars. Thousands took to the streets, erected roadblocks, and defied police. Within the span of three days in April 2000, several protesters were killed, including a 17-year-old boy. Then-president Hugo Banzer declared martial law. The government finally agreed to grant water control to the grassroots coalition of protesters with the promise of dissolving the private contract.

The memory of that conflict remains in the hearts of many Bolivians. “In a lot of Latin America, there is a hesitancy to talk about metering due to its association with the water wars,” said Kim Lemme, of the international non-profit, Water for People. The mention of metering, she said, often elicits murmurs of “Bechtel,” one of the despised private water companies. “Being able to get people used to the idea of metering,” she concluded, “is powerful.”

Bolivians are still adjusting to the idea of meters. However because of innovative funding plans and the example set by model projects, several communities have already made the switch. According to Kate Fogelberg at Water for People, over 120 rural communities in Bolivia now have metering systems. While Chileans enjoy 96 percent metering, they still face challenges in their water sector, particularly in the over-allocation of rural water rights that leaves remote, arid, downstream households dry.

A progressive metering policy, accompanied by careful regulation, has made Chilean cities standout sites of clean, affordable water in Latin America. Because of its broad implications, water metering can act as an indicator of both water conservation policy and practice. However, spotty data coverage may hamper the development of a metric to assess how much water consumption is metered in countries, mainly because information is self-reported by the utilities themselves and only in selected countries. Representing the status of water resources, describing systems, and guiding policy meaningfully is an Augean task, one in which metering will play a part.


[2] http://www2.udec.cl/~mquirog/OECD%20Water%201.pdf

This post is the first in a series on water metering. The next installment will look at residential metering in the United States and other developed countries.

Rachel Lipstein is a junior at Yale College majoring in English major with a concentration in Writing. She is interested in sustainable agriculture and enjoys spending time on farms. Previously, she worked on the 108-foot sloop, Clearwater, which is dedicated to protecting the Hudson River through education, advocacy, and celebration.

Posted in: Environmental Performance MeasurementEnvironmental Law & GovernanceEnergy & Climate

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