This paper examines the relations between tariffs and sustainability, efficiency and equity, using a unique data-set for 308 cities in 102 countries. Higher water tariffs are correlated with lower per capita consumption, smaller local populations, lower water availability, higher demand and a lower risk of shortage. Aggregating to the national level, higher tariffs are correlated with higher GDP and better governance. A different country-level analysis shows that a higher percentage of the population with water service is correlated with better governance, higher GDP and a greater risk of water shortage. The relation between water prices and service coverage is statistically inconsistent.

We examine the Dutch national groundwater tax (GWT) -a 'win-win, green' tax that promised to reduce distortions by simultaneously reducing the income tax burden and improving environmental outcomes. We find no evidence of these impacts. Instead, we see that the GWT increased distortions by taxing a narrow base (a few drinking-water companies reliant on raw groundwater) and interfering with groundwater management programmes funded by an existing provincial groundwater fee. The Dutch government revoked the GWT for being fiscally inefficient and environmentally unhelpful on 31 December 2011, but this story provides some useful lessons.

California's water transfer system depends on the Sacramento‐San Joaquin Delta to move water. Unfortunately, the Delta's ecosystem appears to be suffering from this use – and other uses. After discussing the stakeholders in the Delta, the causes of ecological decline, and the choices for change (including a radical political‐economic market), I conclude that business‐as‐usual is over, that any solution is costly, and that the politicians and bureaucrats in the middle of this process benefit from conflict and inaction. The Delta will remain broken for the foreseeable future.

This paper examines the relations between tariffs and sustainability, efficiency and equity, using a unique data-set for 308 cities in 102 countries. Higher water tariffs are correlated with lower per capita consumption, smaller local populations, lower water availability, higher demand and a lower risk of shortage. Aggregating to the national level, higher tariffs are correlated with higher GDP and better governance. A different country-level analysis shows that a higher percentage of the population with water service is correlated with better governance, higher GDP and a greater risk of water shortage. The relation between water prices and service coverage is statistically inconsistent.

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