A new report from the Water Services Association of Australia (WSAA) and The UK Water Report (TUKWR), is warning that water and wastewater ‘services’ provided by the environment to the global water industry for free are in decline, and need to be replaced by paid-for alternatives.

Drawing on evidence from Australia and New Zealand, and England and Wales, the report contends that the global water industry is undergoing a major transition akin to the energy transition.

This fundamental shift underpins recent increases in water investment, and means water consumers need to prepare for higher water bills for the long-term.

The report says that the water environment can no longer be used to draw free resources from or to discharge waste to at minimal cost – just as the air environment can no longer be used as a free disposal route for greenhouse gas emissions.

Adam Lovell, Executive Director at WSAA, said:

“Globally, we are seeing less reliance on natural catchments and moves to manufactured water. We are seeing the need to treat wastewater to higher levels because rivers and beaches have reached their capacity to absorb the community’s wastewater. And across the globe, we are having discussions on the best way to manage biosolids from wastewater treatment.

“Just as the energy industry is in a fundamental transition, so is the water industry. The underlying driver of change in the water industry is the reduced reliance on the environment to provide ‘free’ inputs or services to industry. The sector is now investing in systemic changes in infrastructure, management and consumption.”

The decline of free environmental services is a landmark point of change, and sets the global water industry on a path to sustained higher investment and bills. In Australia and England and Wales, charges were flat for the decade before the latest price determinations.

Now, England and Wales will spend 71% more on water in 2025-30 (£104bn) than in 2020-25, pushing average bills up by 36%. Australia is set to invest AU$120bn over the next ten years, and Australian customers are facing similar price increases. In Sydney, for instance, bills will rise 35% over five years.

Forward projections in both countries suggest that today’s elevated level of investment and bills will not only be sustained, but will need to increase further.

Christopher Gasson, Publisher of TUKWR and its parent Global Water Intelligence, commented:

“Unlike the energy transition, which will eventually pay for itself through low cost renewable energy, the water transition only brings additional costs. But this report is not just about warning the public that water services will cost more in the future. Water bills are not money down the drain. They represent an investment in the future: an investment in the smart, green, flexible infrastructure that will ensure that future generations will find our cities liveable, nature flourishing, and the economy growing. The alternative is not just more expensive in terms of the scale and impact of future water crises. It is also much more unpleasant in terms the quality of life.”

Adam Lovell added:

“Without a detailed understanding of the fundamental transition underway, policy makers risk drawing the wrong conclusions and creating the wrong policy settings for the industry.”

Click here to download the report