Water/Energy conservation and fairness in collective burden sharing

Climate change and human activities increasingly threaten the supply of fresh water. As a result, regions and cities have experienced severe droughts that require drastic cuts in water consumption. How to distribute the reduction in waters consumption among residents is therefore an increasingly important question. In particular: how should the burden of be distributed between consumers with different initial levels of water consumption. The project "Water conservation and fairness in collective burden sharing" has studied this issue in the context of the 2018 drought in Cape Town. Cape Town recently faced the reality of climate change shifts as the metropole experienced the worst three-year drought in four centuries. Dam levels dropped to unprecedented lows which led to drastic measures to reduce water consumption. Effective demand-side management and reduction in water consumption has been the key driver in the recovery of dam levels. The has elicited beliefs in the general population of Cape Town about how the burden of water reduction was distributed during the last drought and their views on what is a fair distribution of this burden. We have also examined how information about actual burden sharing and the likelihood of future droughts affect fairness views and policy preferences. The key part of the research project has been the design of a large-scale survey conducted across a representative sample of over 3,000 residents in Cape Town. The survey design has two parts. In the first part, respondents are asked incentivized questions on their beliefs about the water consumption of high-income and low-income households during and after the 2018 water crisis. In the second part, we ask the respondents about how they think would be a fair way to share the burden of water reduction during a future drought and about their attitudes to different policies. Before they respond, the respondents are randomized into one of four treatments that differ with respect to what information the respondents get before they answer. Participants were also asked about their attitudes to specific water policies. The find that the vast majority of the respondents showed a large misperception about the amount of water consumed by rich and poor households during the drought in Cape Town. Almost all respondents believed that rich households consumed significantly more than poor households during the drought. We find substantial heterogeneity in what the respondents view as a fair way to share the burden. The vast majority chose either the equal reduction rule (42%) or the proportional reduction rule (45%) and only 13% chose the equal reduction rule. We find that people with primary or secondary levels of education had higher odds of choosing the equal reduction rule and lower odds for the proportional reduction rule. The behavioural treatments only have a small effect on burden-sharing preferences.

Climate change and human activities increasingly threaten the supply of fresh water. As a result, regions and cities have experienced severe droughts that require drastic cuts in water consumption. How distribute the burden of the required reduction in waters consumption is therefore an increasingly important issue. The project "Water conservation and fairness in collective burden sharing" has studied this issue in the context of the 2018 drought in Cape Town. We have studied both what a representative sample of residents view as a fair distribution of burdens, but also their beliefs about how the burden was shared during the drought. We document considerable heterogeneity in what people view as fair and systematic misperceptions of how the burden was shared during the 2018 drought. Results have been presented to local authorities and to the Water Research Commission in South Africa.

This study addresses perceptions of fairness of different income groups about how the burden of collective action in conserving water and energy should be allocated in times of crisis. Using the insights of fairness principles, behavioural interventions will be designed that incentivise conservation of scarce resources, as well as, payment for received municipal services. The first part of this study will assess how people from different income groups have responded to demand side management interventions related to energy and water crises (tariffs, behavioural interventions, media announcements) and other measures such as expenditure on large infrastructure projects in the City of Cape Town municipality. In particular, the study will evaluate whether there are differing perceptions of fairness between groups about how the burden of collective action in conserving water and should be allocated. In addition, we would like to investigate the unequal burden sharing regarding women and utilities consumption. As main users of utilities in a household, it is probable that women may be disproportionately hit harder by the water/energy crisis than men as scarce or unpredictable supply is likely to affect them more. During the second part of the study, surveys and lab experiments will be conducted in order to measure the different perceptions of fairness across income quantiles and how behavioural incentives may facilitate contributions towards collective action and provision of services. During part three of the research project, drawing on insights about fairness principles, we will design and test behavioural nudges aimed at incentivising payment for services. The nudges will be customised based on differences in subpopulations identified in part 1 and part 2 of the project. In line with our previous research, we will utilise the utility billing system to distribute messages to different subgroups of households.