Why we are too wet about water

Something momentous is happening to our water, something that will transform the way societies and economies work around the globe in the next century. We are starting to run short of the stuff in some parts of these wet and windy islands, mainly because we demand more and more of it. The usual response to looming water shortages would be to dig a few more reservoirs, sink a few more boreholes and expand the supply.

But a powerful consensus has recently emerged that this is completely the wrong answer. Instead, rising demand should be constrained. We will come to the whys and hows, the rights and wrongs, of that constraint in a moment. But first, its significance.

When a commodity goes into short supply the price goes up. That encourages suppliers to find new sources or to develop alternatives. Since civilisation began, humanity has been able, by and large, to expand supplies of most things in line with increasing population and rising affluence. Of course there have always been local shortages for one reason or another, and a few more esoteric commodities, such as whale products, have virtually disappeared because of over-exploitation.

But generally we have been able to win more and more supplies through a combination of technological advances, improved efficiency, discovering alternatives and looking further afield. Becoming richer has been all about consuming more stuff, stuff as diverse as space, water, energy, clothing, travel and electronics.

Of course this cannot go on for ever. The interesting thing about being alive in the century after 2000 is that this will be the age when supply limits will bite. The human population will probably stabilise at a little less than twice its present level of 5.8 billion, but economies will keep on growing. Because of the weight of human numbers and their aspirations for higher standards of living, all sorts of industries that rely on extracting both renewable and finite natural resources - fossil fuels, water, timber, fish - will start hitting global limits.

That could lead to escalating shortages and prices. Businesses, governments and educated consumers will want to avoid the inevitable chaos and unhappiness, but they will also want to avoid the corruption and inefficiencies that would spring up if the state moved in and started rationing. Demand constraint, or demand management as it is more congenially entitled, will be one of their most important solutions to these looming supply crises.

England's water shortages are showing us the way to a future in which the link between rising standards of living and rising consumption of materials is finally broken. The new consensus on the need for demand management emerged last week, when the 27 smaller water companies of England and Wales announced that they wanted several big new reservoirs to be built, and they were swiftly slapped down by the two government water regulators, the Environment Agency and Ofwat. Both argued that the companies' efforts and investments should go into cutting waste - by themselves and their customers - in order to stop the steadily growing demand for water. Talk of spending large sums securing new supplies was premature.

The regulators were backed up by environmental organisations, including Friends of the Earth which pointed out that using more and more of the rainwater that falls on Britain was harming wildlife. There are now numerous, well documented examples of rivers, wetlands and lakes that have been damaged by water companies and farmers taking too much.

Yesterday the Government's Round Table on Sustainable Development, which advises ministers on long-term issues affecting the environment, economy and society, added its voice to the chorus calling for demand management.

Water companies, large and small, disagree. They call for a twin-track approach - demand management and investment in expanding supplies. They argue that climate change means it could well become drier and the time has come to plan for this. Furthermore, they claim that however hard they try to change attitudes and encourage water thrift, customers will continue to want more water.

Many customers will think all this is crazy. Britain is plainly a rainy country, and if some parts such as the South-East and East Anglia are suffering shortages then build new reservoirs, sink new boreholes, or pipe the stuff down from the wetter west and north of the country, they say. But do they wish to see their water bills rise, still further, to pay for all the investment this will entail? What if it works out much cheaper to use water more wisely instead?

According to the regulators, it makes much better economic sense to cut the huge quantities that industry and its customers waste than to expand supplies. Of course, people also use other commodities such as fossil fuels in an extraordinarily wasteful way while their demands keep on rising. Only with water are the regulators starting to press home attempts to cut demand.

The companies are, quite rightly, being forced to cut leakage from their pipes. But, as examples of best practice from the most enlightened companies shows, there is also enormous scope for them to help their customers use less without having to share baths, drop hygiene standards and generally live more miserable lives.

When they send out the bills, they can include vouchers that entitle customers to discounts on water-saving devices - such as gravity-fed showers, water butts, and end-of-hose attachments that allow you to turn the flow on and off there instead of having walk back to the tap. The companies all ought to offer their customers free leak detection. And it really isn't too much to expect people to turn off the tap while they brush their teeth.

But there is one really painful nettle which has to be grasped - the much loathed water meter. Having your consumption of water measured does, as trials have repeatedly shown, encourage people to use it more carefully. It makes no sense to meter every home in the land; for one thing it is difficult to provide water meters in flats. But it is fair and reasonable to insist that households that use a lot of water (and can afford to pay), such as those with gardens and outside taps or swimming pools, have meters, fitted free.

The consensus on the need for demand management is far from solid; the next government and the public have to sign up. Then we can move on to do the same for other key commodities - energy, timber, perhaps even travel - and find export markets for our techniques. A future beckons in which small really is beautiful and less means more.