The irony of water scarcity on a planet 70% covered by ocean does make us gaze longingly at the seas as the ultimate answer. The public, politicians and water authorities continue to hope that cost-effective and environmentally friendly desalination - the removal of salt from seawater to make it drinkable - will come to the rescue of water-scarce regions. In most places, however, desalination is a technology whose time has not yet come.

Desalination is currently in use in approximately 130 countries. The only significant capacity is in the Persian Gulf, on islands with limited freshwater supplies, and in selected other locations where water sources are limited and the public is willing to pay high prices. The installed desalination plants have the capacity to provide just three one-thousandths - 0.3% - of total world freshwater use.

From a technological standpoint, desalination works - but in dollars, energy use and environmental impacts, it is an expensive way to meet freshwater needs. The actual price of desalinated water is site-specific. It depends on a number of factors, including labour costs, energy sources, land availability and the salinity of the water to be purified.

Experience to date in California suggests that it cannot be delivered for anything less than the cost of production, which is unlikely to fall below the range of US$ 3.00 to US$ 3.50 per thousand gallons (kgal; in standard international units, US$ 0.79 to US$ 0.92 per cubic metre (m³)), even for large, efficient plants - and could be as much as US$ 9.00 to US$ 10.00 per kgal (US$ 2.38-2.64 per m³). Only the low end of this range just touches the price of water that might be paid by urban water users, rarely more than US$ 1.00 to US$ 3.00 per kgal (US$ 0.26-0.79 per m³). And it is far above the price typically paid by farmers in the western United States, whose costs may be as low as US$ 0.20 to US$ 0.40 per kgal (0.05-0.11 per m³), although this is to some extent due to federal and state investment in major water-supply and delivery systems.

In part, costs are high because seawater desalination is among the most energy-intensive water supply options available. This also means that relying on it increases the water supplier's exposure to energy-price variability and energy-price increases over time. Desalination has environmental impacts that must be understood and mitigated as well. These include effects associated with the construction of the plant and, especially, its long-term operation, including the effects of withdrawing large volumes of water from the ocean and discharging large volumes of concentrated brine. Indirect impacts associated with the substantial use of energy must also be considered. There are some cases where desalination can provide environmental benefits by reducing withdrawals from rivers and streams - although usually there is no binding mechanism to ensure that these gains are actually delivered.

Explicit and implicit subsidies may also affect the price. For example, in Israel the Ashkelon desalination plant is constructed on land provided at no cost by the Israeli government. The trouble-plagued Tampa Bay desalination plant in the United States was provided low-cost capital by a Floridian regulatory entity but is ultimately producing water at US$ 3.38 per kgal (US$ 0.89/m³) - nearly double the initial estimate. In the United Arab Emirates, the Taweelah A1 plant is provided energy at a subsidized cost of US$ 0.02 per kWh. Given that it uses a process called reverse osmosis, where typically one-third to one-half of the water cost derives from the use of electrical energy, this is a substantial subsidy.

In many parts of the world, alternatives to desalination - such as improving conservation and efficiency, accelerating wastewater recycling and reuse, purifying low-quality local water sources, encouraging regional water transfers, and implementing smart land-use planning - can provide the same freshwater benefits at far lower economic and environmental costs. This is certainly true in California, where several new desalination plants have recently been proposed.

Even where proponents say it is possible to produce freshwater at competitive prices, experience shows that these claims should be viewed critically. Projections can change once investments are underway, leading to higher than expected user costs or a call for subsidisation. Poseidon Resources, the group who initiated Florida's Tampa Bay Project, repeatedly claimed it would bear all of the financial burden and risk associated with the plan to desalinate ocean water at an old power plant in the city of Carlsbad, California and sell it to public water agencies. But now it says that in order to be commercially viable, the project needs massive public subsidies of at least US$ 530 million in tax-free state bonds and an annual subsidy of US$ 250 per acre-foot (US$ 0.20/m³) of water produced from the Metropolitan Water District of Southern California.

These are public subsidies to fund a private project designed to produce profits for private investors. Compared with more economical water sources of untapped conservation and efficiency, recycled water, capturing storm water, and transferring some water from use in agriculture, the experience with Carlsbad suggests that desalination is still too expensive for California. Furthermore, California's coastal resources, including ocean waters, are part of the public commons and are protected under the public trust doctrine, and it is not clear whether public funding should be used to develop public resources for a private investor.

Desalination facilities should be approved only where water agencies have implemented all of the more cost-effective conservation and efficiency measures already. Public subsidies for desalination plants are inappropriate unless explicit public benefits are guaranteed, such as restoration of ecosystem flows. Most of the time, the economic evaluations of desalination presented to regulators and the public do not adequately account for the complicated benefits and costs associated with issues of reliability, quality, local control, environmental effects and impacts on development. Until they do, the true cost of desalination will remain a mystery.

Peter Gleick is the President and Heather Cooley is a Senior Research Associate at the Pacific Institute. The Pacific Institute, based in Oakland, California, is a nonpartisan research institute that works to create a healthier planet and sustainable communities. Through interdisciplinary research and partnering with stakeholders, the Institute produces solutions that advance environmental protection, economic development, and social equity. The Pacific Institute Water Program seeks to transform the way societies perceive, manage, and use freshwater resources for more effective and sustainable strategies for meeting human and environmental needs for water.www.pacinst.org.