Water Resources Professional Project Reports

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Facing water scarcity, population growth, and issues of climate change, New Mexico municipalities should consider incentive-based pricing (IBP), empirically shown to encourage conservation. Given that adoption of IBP will likely be affected by community and political will, it is important to know what socio-economic and demographic factors may influence a municipalitys decision to adopt. As such, this research descriptively summarizes and catalogues the use of IBP structures for a select sample of 30 NM communities; further, t-tests are used to statistically investigate significant differences in a select set of 12 community characteristics between those that adopt IBP and those that do not. In summary, results indicate that the majority of the sample municipalities (67%, or 20 out of 30) incorporated some type of IBP structure. However, in many of those cases, the increasing block rate steps in an IBP structure are set relatively or even extremely high, compared to typical or expected distributions of residential household use. In addition, the evidence indicates that means of the percent of individuals who voted for the Green party in the 2012 election, of individuals with Bachelor degrees, of individuals who speak Spanish at home (and speak English 'less than very well'), and of the population, per capita income, and elevation for communities with and without IBP were significantly different (at least 0.10 level). Knowing what differences likely exist may aid planners in helping municipalities to develop IBP for conservation in the future by tailoring conservation or rate structure education to the specific needs of municipalities without IBP. As such, it is recommended that this research be expanded upon to include a larger sample and a broader array of characteristics. Keywords: incentive-based pricing, climate change, New Mexico, municipal water supply, demand-side water management.

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incentive-based pricing, water conservation, climate change, municipal water supply, demand-side water management


A Professional Project Report submitted in partial fulfillment of the requirements for the degree of Master of Water Resources, Water Resources Program, at the University of New Mexico.