Israel Ends Drought Tax but Raises Water Prices

As seen at TheMediaLine.org.

The Israeli government announced a deal over the weekend to temporarily freeze a controversial drought tax while significantly raising water prices throughout the country.

The agreement comes after months of often bitter wrangling between various Israeli government agencies over the best way to tackle the water crisis the country is facing after years of drought.

The final deal, agreed to Friday by Israel’s Water Authority, National Infrastructures Ministry and Treasury, sets out a dual staged increase in the price of water, with a 25% price increase set for January followed by a 15% increase in June, 2010 and an additional minor increase in January, 2011.

“In the end, the deal is that the drought tax will be frozen from the first of January until April,” Uri Shor, a spokesperson for Israel’s Water Authority, told The Media Line. “The drought tax will be automatically renewed in April unless we have a very good winter, in which case we’ll dismiss it all together.”

The drought levy, which taxes each cubic meter above a set cap, is intended to lower demand in Israeli cities after five years of drought. While Israel’s National Infrastructures Ministry claims the tax lowered water consumption by 15% over the summer, it has stirred controversy since it was passed five months ago. Friday’s agreement will freeze the drought tax for three and a half months beginning in January and then automatically resume for the summer months.

“We are supportive of a drought levy,” Gidon Bromberg, Israeli director of Friends of the Earth, Middle East, told The Media Line. “We see it as an important instrument in the conservation of water and we think it should stay.”

“The drought levy has little to no impact on low to middle income Israelis,” Bromberg said. “because it’s a tiered system it only comes into effect when people use inappropriate amounts of water, with large gardens, pools and things like this.”

“We also support the increase in prices because prices need to reflect the scarcity,” he added. “It’s not a social justice issue it’s an issue of better regulating the water economy.”

“Israel has experienced five consecutive years of drought,” Prof Eli Feinerman of The Hebrew University of Jerusalem’s Faculty of Agriculture told The Media Line. “God is playing with us, because the statistical chance of this happening is one percent.”

“Two thirds of the country’s water is going to urban areas while only one third is going to farmers,” he said. “So the farmers are very upset about the quotas put on them.”

“The water authorities needed a way to drastically lower demand for water,” he explained, “but Israeli law does not allow for government subsidies to cover the prices of water, so there were two options: to temporarily forbid any watering of lawns or try to temporarily reduce the urban demand for water with higher prices.”

Scientists say the combination of the increasing water demands of a growing population and lower rainfall averages as a result of climate change are leading Israel to a delicate future.

Professor Feinerman argued that while the drought levy had become politically linked to a rise in water prices, it was important to distinguish between the two.

“There are two totally separate things going on here,” he said. “One is the drought levy, which is a temporary measure to limit water demand, while the other is reform of the water prices, which has been spoken about and planned for a number of years.”

“The price of water today in Israeli is not reflective of the limited amount of natural resources available to us,” Feinerman said. “We use as much of the natural resources as we can but the population is growing and we cannot use much more than we use now.”

“We have to use secondary sources like the desalination of seawater,” he said. “The cost of developing desalination systems has to be covered by the prices we charge for water. In addition, until now the cost of renovating and developing our water infrastructure has not been covered by the water prices. Now this kind of development will be covered.”

Israel is soon expected to be able to provide for the majority of the country’s water needs through water desalination plants. Israel’s newest water desalination plant was inaugurated last week and connected to the country’s National Water Carrier. The plant is expected to produce 127 million cubic meters of water annually, more than is provided by Lake Kinneret, when it reaches its full capacity next year.

“Because of all the financial demands from the desalination plants and all our other investments, we need to raise water prices,” said Shor, the Water Authority spokesperson. “But raising the price of water is not an easy thing to do politically. We are not politicians, but that’s the problem.”