The Rebirth of “Decentralized Water”

In Asia today, cities increasingly face a compound threat: record-breaking heat and escalating thirst. From Japan to India people risk sudden heatstroke deaths or slow-motion stress as soil desiccates, crops wither, reservoirs evaporate, and aquifers sink. All these risks amplify as sweltering urban populations seek relief from clean, cool water only to find taps that sputter and wells that run dry.

Why is this happening?

Water grows scarce where it lacks value in exchange. And no city is immune from the political consequences from offering this artificially cheap liquid asset. Ho Chi Minh City’s piped supply network has grown so unreliable it forces many to pay extortionate prices to private water vendors. Beijing cracks down in vain on what it deems “excessive” household water consumption. Jakarta’s troubled waters hamper industrial operations in ways that accelerate financial losses and job cuts. As reservoirs evaporate, Chennai families wait hours for public hosepipes, while hotels and restaurants curtail operations. Even Hong Kong fears this existential challenge.

Officials tend to blame “water shortages” on physical forces that lie beyond their control. That is convenient. Yes, pollution, industrialization, climate change, droughts, or a failed monsoon all combine to apply pressure on a finite local resource. But far from easing up, these external stresses will only intensify. So, then what?

It is also too easy for authorities in Asian countries to offer the same simple and flawed responses: centralized dams and desalination plants, or unilaterally imposed rations, restrictions and rate hikes. Command-and-control approaches to dynamic water and people not only harm local ecosystems and economies, they also punish the poor, reward waste, undermine long-term reforms, and delay technological adoption.

But if the urban water monopoly is so broken, is there a better route to resilience?

Absolutely. Yet to find it Asia must rediscover from its own past the unlimited potential of what I call “decentralized water”.

What does this concept mean? Well, much as democracy decentralizes political decision-making, as the internet decentralizes information flows, and as blockchain technology decentralizes valued assets, so can these same innovations now decentralize water in ways that ensure equitable access and efficient use for all.

In practice, decentralized water is just a modern version of an ancient and robust Asian system. In arid regions this system dates back thousands of years and is found throughout the continent, known for example in Persia as qanat, among the Uyghurs as karez, in Bali as subak, or aflaj in the Arab world. All these diverse names described the same self-organizing form of local water governance, where no one person is in charge.

As such, decentralized water does not break with the past so much as revive and embrace a proven yet forgotten solution. Indeed, recent generations of Asia’s modern families and firms have endured top-down, centralized water institutions – federal ministries, state agencies, district utilities – for so long that few can recall, know or can even imagine any other option. But older alternatives both exist and offer us potent lessons about how to thrive in a future of water scarcity.

Unlike modern cities, ancient water systems had no hierarchy, no management HQ, no single point of authority – no one to dictate who gets how much water for which uses at what price. Instead, diverse stakeholders from multiple sectors (families, shops, temples, schools, producers of food and goods) gathered around a common water resource. They invested time, money and effort into building and maintaining the water supply and distribution infrastructure shared by all. They kept track of and recorded respective efforts to capture and transport this water. In return, each accountably earned a share of that water for exclusive use. Secure access was matched in proportion to defined usage. As supply varied by season or year, stakeholders could adapt their demand by negotiating and trading shares of the water with each other. Human uses and decisions were as fluid and efficient as the resource itself.

Still, these remnants are more than living artefacts. They are proven social contracts, resilient models, working institutions. They endure the stressors of time, political turmoil and extreme weather. Rather than merely preserve these, we can adapt and scale up their internal workings and incentive structures to absorb the droughts, heatwaves, and climate shocks now underway.

How? Adapting ancient water governance does not mean a romantic Luddite-like rejection of new technology or current institutions. Bangkok or Ulaanbaatar need not abandon treatment plants, membrane filters, hydraulic pumps or flush toilets and return to face-to-face bartering of neighborhood water flows. To the contrary, Asian cities most effectively decentralize water by leveraging modern tools such as advanced metering, remote sensing, online trading, artificial intelligence, and blockchain protocols. Rather than mess around with pipes, valves and reservoirs, cities can upgrade the value of this hardware with “soft” innovations and incentives that share and shift the fulcrum of water-use decisions downward and outward. Devolving authority to users of water ensure these “owners” align their interests with the water agency and more effectively ensure that demand is equal to supply.

In many sectors, Asia’s authorities understandably wrestle with a tension between top-down rigidity and bottom-up chaos. No centralized official can know when and where to allocate liquid assets to whom, for which purposes and at what rate. That is as true with financial flows as it is rivers and aquifers. Now, just as blockchain protocols begin to decentralize money from national banks and their fiat renminbi, rupee, ringgit or rupiah, it is worth noting that water has become the universal currency of the 21st century.

Treasure what you can measure: The Valley of the Moon Water District (VOMWD) in California installed advanced or remote digital meters, combined with an incentive structure that paid metered accounts based on how much water they saved (Credit: AquaShares)

Upgrading the concept of ancient water systems may sound intriguing or quaint. But how might decentralized water work for modern megacities? Testing the hypothesis would not be easy. Hypercautious public water authorities earn no rewards for experimentation. Yet thirst is tipping the scales: Trying something outweighs the risk of inaction.

So across the Pacific a city just north of Silicon Valley was first to dip its toes in decentralized water. One problem was seasonal runoff – human pressure to extract and divert water peaked exactly when endangered salmon needed rivers to flow. Another problem was economic: A unilateral rate hike risked a public backlash.

With funds from the California Water Foundation and support from the Sonoma Water Agency, a pilot program was launched. A retail supplier, Valley of the Moon Water District (VOMWD), would install advanced or remote digital meters, combined with an incentive structure that paid metered accounts based on how much water they saved.

The results altered behavior. Instead of wanting water to be cheap or free, end users began to feel a sense of ownership over the water they saved, monitored their demand online, and wanted credits earned to be worth more. Some fixed leaks, shortened showers, considered drip irrigation in their yards and other water-saving devices at a rate faster than those outside the pilot. As VOMWD’s general manager Dan Muelrath put it, “this is really putting the power in the customers’ hands to see how much they want to do [to conserve] and how much they want to get rewarded.”

Critics might dismiss this initial proof of concept as a fluke: “Well of course, it’s clean, green, high-tech California.” But the Sonoma pilot was followed by a more ambitious demonstration project in Morocco. Ecologically, Marrakesh’s only reservoir was slowly evaporating, groundwater tables were drying up, and the sea was too far away to desalinate. Economically, tourism was driving demand for golf courses and hotels, which competed for water with low-income families.

New variations on the decentralized water model are being tested in Latin America. The concept is also being applied to other branches of the sector, from groundwater basins to the reduction of physical leaks and apparent loss, or non-revenue water (NRW). But nowhere does decentralized water hold more potential than in Asia’s increasingly hot, dry and thirsty cities.

So, what is holding them back?

Some may contend that access to water is too precious for people to exchange with each other, even though that is what we have done for centuries. Others may claim modern water supply is and must remain a “natural monopoly”, free from internal competition.

If so, consider a closely related resource, in which fossil fuel, hydropower or nuclear fission energy used to be organized around centralized generation with wires radiating outward. Power was another so-called natural monopoly. Then came the cleantech revolution. Light renewable tech such as wind and solar have rapidly decentralized the grid, keeping wires in place but allowing electrons to shuttle back and forth between families and firms. New firms compete to install lighter, cheaper photovoltaic panels on rooftops as an investment with a high return. Cost savings and ecological efficiency flowed from these now decentralized exchanges, with more accurate pricing and more balanced supply and demand.

Change is always difficult. The potential for trading shares or credits of water savings may make some – especially those who now control all decisions – uncomfortable. But as noted earlier, other solitary hierarchies or ‘natural monopolies’ of power and influence – government authority, religious dogma, university libraries, finance ministries, energy utilities – have all undergone a similar shift – and grown more resilient in the process.

As temperatures rise, drought lingers, and the resource grows scarce, decentralized water is an approach whose time may come, yet again, in a rebirth that is both an institutional possibility and an ecological necessity.