Good News Bad News: Bottled-Water Price War Heats Up as Demand Falls

The Wall Street Journal recently reported: "Bottled-water makers have stepped up a months-long price war this summer to win back customers who have turned on the tap to save money and reduce environmental waste."

First reaction - great news, people are paying attention (and maybe the change in the economic circumstances of millions has helped change their thinking about the practicality of bottled water)!  Second reaction - oops, lower prices will mean higher consumption.  

We're winning the argument so they are fighting back in the smartest way possible, or at least what appears to be the smartest way possible.

But remember, even though cheaper bottled water will seem more attractive, lowering prices returns water to being a commodity.  And tap water as a commodity still wins hands down on any comparison of price per liter or quart or gallon (or sip).  A good old fashioned price war also highlights the real economic argument: it's time to rethink how we build our economic analysis.  We need to include formerly externalized costs (the environment which is not a "free" resource, a "free" garbage dump, or a "free" source of energy for humans to exploit), we need to take into account all the costs, not just economic, but health, environmental, and carbon, of all our actions.  In any real economic analysis, one that includes all the true costs, tap water wins over bottled water hands down, no questions allowed.

Next entry: reading list for social and economic change.  Visit www.writerscast.com to hear my interview with Gus Speth, author of "The Bridge at the Edge of the World."  It's a book everyone should read!

Leveling Off