When water resources are inexpensive, or there are no financial incentive to conserve, recycle or substitute water use, economic policy instruments can be employed to change this, usually through market forces. The largest gains will be made in agriculture and industry, which are the biggest water users and polluters. Lack of water conservations is most pronounced in agriculture, which accounts for just 70% of the water consumed globally, 85% of which is used for irrigation. Traditionally, governments worldwide heavily subsidise water supply costs for agriculture, so farmers have little incentive to conserve water, especially that used in irrigation where vast quantities are lost though evaporation. Reductions in domestic water consumption can also save significant amounts of water, especially water used for toilets, showers and laundry and garden irrigation. Taxing water use in agriculture, industry and households is a means of re-valuing it as a commodity to encourage conservation. Taxes can be levied as effluent charges, which is not only an incentive to conserve water, but also reduces pollution. Higher prices for water act as an incentive to reduce domestic water use and as an inducement for domestic water recycling. Even now, for example, Singapore and Japan use reclaimed wastewater for flush toilets.
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