There is overwhelming evidence that consumers use less water if they have to pay for it, writes Denis Staunton, from Brussels.
This week's call by the Minister for Finance, Mr McCreevy, for the reintroduction of water charges has reopened one of the most sensitive political issues of recent years. Opposition politicians argue that householders already pay for water through income tax and that any new charge would amount to double taxation.
But Mr McCreevy's suggestion will be received with satisfaction in Brussels, where the European Commission has long been pressing Ireland to come into line with the rest of the EU by making consumers pay directly for the water they use. The Commission is motivated by environmental concerns, arguing that charging for water encourages consumers to use less of it and that water charges are consistent with the principle that "the polluter pays".
The Commission has frequently expressed its annoyance over the fact that, while EU cohesion funds finance water-processing facilities in Ireland, the Government does little to encourage the public to conserve water. Commission officials have expressed bewilderment at Irish attitudes to water, which many consumers regard as being, like the air we breathe, a limitless resource which costs nothing.
"Irish consumers have to understand that if they want water to be free, they can drink the water that comes from the sky," one senior official told this paper some years ago.
There is overwhelming evidence to suggest that consumers do indeed use less water if they have to pay directly for it.
Water use has declined in Europe in recent years, partly due to such technical advances as the low-flush and two-flush toilet, but also on account of the increasing application of water charges.
But a report by the European Environmental Agency in 2000 suggested that charges are only effective in conserving water if they give the user an incentive to reduce consumption. And the report warned that, unless they are designed intelligently, water charges could have hidden dangers.
"When economic instruments are applied to public water supply, their impact on health and hygiene, and on the affordability of water to poorer consumers, needs to be taken into account. Charges will generally hit the poorer user proportionately harder," the report stated.
Before water charges were abolished in 1996, local authorities imposed a flat rate on all households, regardless of how much water they used. Such a system is not only inequitable, but is a highly inefficient way of encouraging responsible water use.
The key to an environmentally sensible water pricing policy lies in metering water use and billing consumers for what they use. The Department of the Environment considered introducing a metering system in 1996 but concluded that such a measure would be too costly.
In most EU countries, all homes have water meters, and consumers are as conscious of wasting water as they are of using electricity needlessly. In some countries, such as Germany, such frugality is a product of general environmental awareness, but in others it is simply a way of saving money.
In some countries, water is charged at a basic rate up to, say, 1,000 litres a day, and at a premium rate after that, thus heightening the incentive to use less.
Many EU governments impose VAT on water bills, making the cost of water a significant consideration in household budgets, although average water bills vary widely throughout the EU - from €52 a year in Rome to €287 a year in Brussels.
The most powerful argument against water charges is the danger that those who cannot afford to pay the charge will be deprived of a basic necessity of life. Means-testing is an imperfect way of dealing with the problem; and, no matter how low the charge is, some people will find themselves unable to pay.
The Belgian region of Flanders has found an ingenious way around this problem by allowing each household free access to 15 cubic metres of water per person each year. Such a low threshold means that most households will have to pay some charge, but the system can be finessed to ensure that those in need will always have access to water.
Mr McCreevy's enthusiasm for water charges may owe more to the urgency of filling the Government's coffers than to concern for the environment and opposition politicians have good reason to view his proposal with scepticism. But Ireland's unhappy experience with water charges in the past should not obscure the arguments in favour of obliging those who can afford it to pay for the use of scarce resources.
Any new system of water charges must be socially equitable and environmentally effective as well as beneficial to the Exchequer. If the Government succeeds in marrying the principles of sustainable development and social justice, it should be applauded for doing so.